Florin Dobre

Management Performance Audit in Mergers and Acquisitions

Abstract Several rapid changes had taken placed in companies involved in a M&A process, especially when managerial practices are encountered. Consequently, the management performance audit is an efficient analysed tool that quantifies how the economic resources were used by shareholders. While the number of M&A has increased constantly, expect the financial crisis period, not a proper documentation about the link between the M&A process and the managerial audit could be found. The aim of this paper is to examine if corporate takeovers lead to an increase in firm performance and whether the company manager has an important role. By auditing the managers performance we can establish if he took the best decisions in order to increase the shareholders wealth and if he put their wilings into practice. The managers performance can be measured either by quantitative or by qualitative variables. Our study aims to establish if there is a post-takeover long-term performance for the companies supposed to a merger and acquisition process. The results indicate an improvement of financial indicators, as the impact of managerial audit performance cannot be denied.

The Interaction Between Financial Audit and Corporate Governance: Evidence from Romania☆

Abstract In order to conduct a quality financial audit both information about financial indicators and about the corporate governance that a company has are mandatory. This study presents the correlation between financial audit and corporate governance of the entities that are listed on the Bucharest Stock of Exchange that had to comply with IFRS approach. Using a simultaneous equation model, positive influence is detected between financial audit, proxy by audit fees, and the type of auditor and negative effect is found between the existence of audit committee, the non- existence of CEO/chair duality and the one tier management system.

The Impact of IFRS Adoption in Romania upon the Earnings Management of the Bucharest Stock Exchange Entities

Abstract The adoption of IFRS in Romania affects the performance of the companies which are going to apply them for the first time. While the listed companies have mandatory adopted the International Financial Reporting Standards (IFRS) for consolidated financial statements, the individual financial statements are compulsory to be reported under IFRS only from 2012. A comparison between Romanian Accounting Standards (RAS) and IFRS, in terms of earnings management metrics, was realized upon the entities that are listed on the Bucharest Stock of Exchange (BSE). Significant improvements were observed in the year of adoption when variability of earning management regarding the variability of net income, the variability of cash flows, the correlation between accruals and cash flow and the value toward positive earnings metrics were analyzed.

Similarities between the Acquirer and the Target Company in Successful Takeover Bid Offers

Abstract In order to narrow the high competition between firms that operates in the same industry, mergers and acquisitions (M&As) transactions are frequently encountered in Romania. In many M&As can be found some similarities between the acquirer and the target company. The study analyze how a successful takeover bid offer is influenced by similarities regarding the age, the geographical position, the industry or ownership between the acquirer and the target company. The results point out that some variables have an important influence on the successful takeover bid, while others are not significant in the acquirers point of view.

Risk management, corporate governance and financial performance of the banking system in Romania

Abstract The recent global financial crisis has raised a number of questions with regard to corporate governance of banking financial institutions. There was a series of “voices” that expressed their concern and even the lack of confidence in the role of corporate governance at the banking system level, and not only, in preventing the effects of this crisis. The main objective of this research is constituted by the study of the corporate governance influence at the banking system level in Romania on the risks management area and of banking financial performances. The used research methodology is predominantly quantitative. This methodology is based on a descriptive statistics, having as objective the analysis of corporate governance characteristics, the appreciation of the risks management level and the performances recorded at the level of the Romanian banking system. In the realisation of this study, the calculation of central tendency indicators, dispersion and form of distribution were used with the help of the SPSS software under Windows (Descriptive Statistics).

A multiple regression model for selecting audit team members

Abstract The optimization of the audit process has always been a priority for audit academics and professionals. Following a review of the audit literature on this topic, we conclude there is a consensus among authors that one of the auditors primary concerns is to optimize the allocation of resources for audit missions while keeping the audit risk at an acceptable level. This paper focuses on one of the key issues identified by various authors regarding the optimization of the audit process: selecting the m of the audit team. All audit firms are aware that the human resource is their most important asset and recognize the importance of finding the balance between the skills of audit team members and the complexity of audit engagements. The main purpose of this optimization process is to help auditors not taking unnecessary risks avoid under-auditing and to keep costs to a competitive level avoid over-auditing. We propose a multiple regression model for determining the optimum number of hours to be involved on audit engagements depending on several client related parameters e.g. financial performance indicators, client size, complexity of client operations, etc. Further, we examine the possibility of using the model for creating an expert system that would assist in selecting the right mix of audit team members depending on their experience and skills.