External Audit and Information Transparency – Empirical Study on European Banking System
Author:
Associate Prof. Cristina Alexandrina ŞTEFĂNESCU, Ph. D.
JEL:
M10, G30
DOI:
Keywords:
corporate governance, transparency, banking system, external audit
Abstract:
Basing on the external audit’s role in influencing corporate governance effectiveness, by enhancing the credibility of financial information through transparent financial reporting, external auditors being often considered as “gatekeepers” who monitor managerial behavior on behalf of other stakeholders, the following research question arose: “How does corporate governance, assessed through external audit affect information transparency and financial performances in banking system?”\r\nThe results of empirical analysis performed for testing the hypotheses derived from the research question confirms the status of the external audit, its membership to „Big Four” group enabling it to control the so-called "agency problems" and improve transparency, thereby reducing asymmetric information, without any influence on the financial performances achieved in European banking system.\r\n