Radu Ciobanu

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.

Does the geographic location influence takeovers

Abstract The aim of this study is to examine whether there is an impact of geographical proximity, between the acquirer and the target company of a takeover process, on the success of the transaction. In order to do this we analysed a complete database of all the takeover bids between 2000 and 2014 on the Romanian capital market. The evidence reveals that not only is the geographical proximity important for the success of the transaction, but that also takeovers can occur across distant locations if the target firm has a long history of its activity that can be monitored by the acquiring companies. We have also tested if there are NUTS regions characteristics that can influence the decision-making, but the results were inconclusive.

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.

IFRS Adoption in Romania: The Effects upon Financial Information and its Relevance

Abstract Starting from 2012, listed Romanian entities have to report their individual financial statements using International Financial Reporting Standards. This study is focusedon presenting the differences between Romanian Accounting Standards and IFRS when financial information is analysed. The research is conducted upon the companies that are listed on BSE and tries to demonstrate if statistically any significance in mean, median and variance was observed among several accounting measures and financial ratios. An analysis upon the entire market and its subsamples, considering companies specialisation, was conducted. The results reveal that no statistically significant differences at median and mean level were observed. The relevance could be identified at variance variation considering the solvency ratio and the return on equity one. Regarding the subsample analysis, the results are mixt.

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.

Mergers and Acquisitions: Does the Legal Origin Matter?☆

Abstract There are many concerns in the financial literature that law can influence the financial development of a state and the mergers and acquisitions area makes no exception. In every countrys economy, the mergers and acquisitions play an important role and usually this field is governed by commercial codes and other special laws. So, governments have developed M&A laws in order to expand the states economies and enhance business performances, thus maintaining proper competitive environments for improving business performances. The study aim is to show that the legal origin of a state can influence the characteristics of mergers and acquisitions both in terms of turnover and size of control premium. The database is provided by Zephyr and SDC International M&A and includes aggregated data on acquisitions and mergers for the 2006 – 2010 periods in all countries of the world. We analyzed 30 countries from 4 different legal systems: common law on one hand and French, German and Scandinavian civil law on the other hand. In order to analyze the relation between the characteristics of a states M&A market and the legal origin of a state, we conducted several regression models. The M&A market was explained by the average value of a transaction and the size of the control premium, and for the legal system we considered several variables besides the dummy variables for each legal system. To do this, we analyzed business indicators that show how attractive is the legal system of a country for investors. For example, common law countries are considered to be business friendly, so a low number of tax payments and a low number of days required to start a business is recorded in these states. There is an opposite situation in the French and German civil law countries. The results show that a countrys mergers and acquisitions market is influenced by the business environment that the law can create for investors who are likely to invest more in a well regulated markets which can protect the their capital, but also can provide an excellent environment for development and capital gains.