The main purpose of the thesis with the title Determinants of transparency of audit firms is to provide an insight into the transparency of audit firms operating on the audit market in the Republic of Croatia, in the observed period of two years (2020 and 2021). With the introduction of Regulation (EU) no. 537/14. audit companies that revise entities of public interest have become obliged to publish transparency reports on their websites no later than four months after the end of the year. Regulation affects on the independence and responsibility of auditors, objectivity, higher quality of audits, which ultimately leads to more effective functioning of the market. The paper analyzed the transparency reports of 46 audit companies. Out of the observed 46 audit firms, in 2020 there were 12% of companies that did not have a published report of transparency, while in 2021 this percentage was slightly higher and amounted to 15% of the total number of companies that were included in the sample. The compatibility of the elements of the audit firm reports on the transparency in comparison with the requirements of the Regulation was examined. According to that, a transparency index was created as a measure of the level of transparency of the audit firms. The research concluded that for 41% of elements the level of compliance increased slightly in 2021 compared to 2020, while for 59% of elements the level of compliance remained unchanged. The transparency report shows a picture of the audit company's operations. Greater transparency encourages: increased client trust in business and financial information of companies, greater employee engagement and easier making of decisions. It also affects on the audit firm's reputation and position on the audit market. Since the level of compliance in 2021 for a higher percentage of elements remained same compared to the previous year, auditing companies should fulfill better the elements of the report as prescribed by the Regulation. The conducted research proved that larger companies (Big Four and audit company BDO) have a higher transparency than others. Better transparency is manifested through the comprehensiveness, detail and accuracy of the information in the reports, as well as the number of audited entities of public interest, the number of authorized auditors and realized revenues. It was found that the transparency index has the best connection with the number of audited entities of public interest, and the regression analysis proved that the revenues from the legal audit of annual and consolidated financial statements of other entities have the greatest impact on the index. With this thesis, the audit firm are encouraged to be as transparent as possible in its operations and presentation of its information to external users.