A Research Regarding the Influence of Financial Audit and of Corporate Governance on Value Relevance

Author:Lecturer Florin DOBRE, Ph. D.; Laura BRAD, Ph. D. Student

JEL:G30, G32, M40, M42

DOI:

Keywords:financial audit, corporate governance, value relevance, Romanian capital market, BIG 4, audit committee, board of directors

Abstract:
The purpose of this research is to reveal if the corporate governance elements and the financial audit characteristics have an impact on the value relevance. Considering this, the research looks if some corporate governance or financial audit characteristics have a significantly influence on the value relevance of the entities that are listed into the Bucharest Stock Exchange. The research is conducted on 250 observations, between 2010 and 2014, by using panel data models. The results provide evidence on the fact that the auditing processes done by a financial auditor from BIG 4, the number of members from the board of directors and the lack of CEO-chair duality have an impact on the value relevance as this are embedded into annual return. An opposite effect it was detected for the existence of audit committee and the ratio between the number of members from the board of directors and the number of members that have executive powers.\r\n

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