Costel Istrate

THE VALUE RELEVANCE OF FINANCIAL INFORMATION UNDER THE INFLUENCE OF COUNTRY RISKS. THE CASE OF THE INDIAN LISTED COMPANIES

Abstract In the decision-making process investors need quality financial information based on reported accounting numbers. Such numbers are present in financial statements and must meet a series of fundamental characteristics, such as relevance and faithful representation. The present paper aims to analyse and assess the value relevance of financial information on the financial market in India under the influence of the main country risk components (i.e. economic risk and freedom to set up businesses, corruption control, financial, fiscal, monetary and investment freedom). The research was carried out on a sample of companies listed on the regulated market in India between 2006 and 2014. The results of applying general linear models have shown that, over time, the country risk can have a significant influence on the value relevance of the financial statements reported at the financial market level.

IMPACT OF THE TRANSITION TO IFRS FOR THE ROMANIAN LISTED COMPANIES IN FINANCIAL DISTRESS

Abstract The transition to IFRS of the Romanian listed companies enables us to provide a comparison of some accounting data reported in the same period and that have been obtained according to different accounting regulations: RAS vs. IFRS. The aim of our paper is to establish if the listed companies in financial distress report a trend of changes due to the transition to IFRS that is different to the one established for the performant companies. Based on the data corresponding to the 2011 financial year (with available RAS and IFRS information), we have calculated Gray’s comparability index (for a series of financial indicators) in the case of the two groups of companies (one in financial distress and a performant one) and we have statistically tested the existence of significant differences between the values of the index for the two company categories. We have found out that some indicators evolve in the same manner (especially the balance sheet structure indexes), others maintain the same trend, but the significance of the variances are different (ROS, ROA, ROE and OI), and, finally, for another series of indicators, the trend of the change caused by the IFRS transition is different for the two groups of companies (leverage and equity).

Statistical Estimation of the Information Influence Regarding Employees on the Romanian Firms Market Capitalization

Abstract Romanian listed companies report information regarding the efficiency of the labor force usage and the availability of working equipment. Such information can be useful to investors, with impact on the investment decision and on the market capitalization. The study proposes to analyze the influence of the information regarding the employees on the market capitalization of companies by using the generalized linear model. The observed sample consists of 70 Romanian listed companies between 2006 and 2011. The obtained results indicate a significant influence of the companies’ reported information regarding the employees and their results on the market capitalization

The Analysis of the Principal Components of the Financial Reporting in the Case of Romanian Listed Companies

Abstract Reported financial statements of listed companies aim to base decisions for all stakeholders. Most times, especially in emerging economies like that in Romania, the issue of harmonization of national reporting standards with international financial reporting to be ensured homogeneity and comparability of information reported is mandatory. When reporting in line with European Directives, the question of identifying the principal components of the financial statements reported by Romanian companies listed is a research problem. The purpose of this study is to identify the principal components of financial statements, in the case Romanian listed companies. Using a sample of Romanian listed companies, the study aims to identify the principal components of financial statements, for the period 2006-2011.

On the Translation in Romanian of IAS/IFRS

Abstract Business globalization, political and economical evolutions have led to the need for regional and international harmonization of accounting and financial reporting. In this context, IAS/IFRS have become the benchmark for many countries, except the US. But the official version of IAS/IFRS is published in English and originates in Anglo-Saxon cultures. The application of these standards in non-English speaking countries raises the difficult issue of their translation. The first translation of IAS in Romanian was issued in 2000. In this paper I analyze the 2008 consolidated version of IAS/IFRS as published on the EU site. I found that the translation of some words, formulas, sentences could be improved. For a list of 16 items, I propose different Romanian version. These proposals are based on my knowledge of Romanian language and of the Romanian accounting but also on the use as intermediate of French version of IAS / IFRS .

Empirical Study on the Analysis of the Global Financial Crisis Influence on the Accounting Information Reported by Romanian Listed Companies

Abstract In Romania, the recent global financial crisis (GFC) has led to macroeconomic imbalances, which has affected the business environment. Furthermore, this led in decreases of the financial position and performance of Romanian companies that encountered difficulties in obtaining the necessary resources needed to finance their activities. The GFC has affected financial data reported by Romanian companies listed at Bucharest Stock Exchange (BSE), which significantly prejudiced the interests of all shareholders. This study aims to analyze and estimate the influence of the GFC, in various development phases, on the financial information reported by Romanian companies listed at BSE. In the study, the financial information is expressed by the values of specific financial ratios related to the financial position and performance of the company. To obtain the research results, in this study the main phases of GFC manifestation at the level of Romanian financial market have been identified. Subsequently, based on the proposed financial ratios, the influence of the GFC on the accounting information reported by the listed companies has been tested and estimated. The study was conducted on the Romanian BSE listed companies during 2005-2011. For data analysis advanced statistical methods, with SPSS 20.0 statistical software were used.