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Independent Auditing Effect on Investment Decisions of Institutional Investors

Author

Listed:
  • Atila Karkacier
  • Fatih Coskun Ertas

    (Gaziosmanpasa University, Tokat, Turkey)

Abstract

It is very important for investors to get accurate and reliable information so that they can earn large amounts of revenue from decisions they make. However, in recent years, population growth, the expansion of the economy and the complexity of economic life have reduced the credibility of the information presented. The need for accurate and reliable information leads to requests for accounting and auditing activities. The independent audit, which increases the credibility of the information provided by the company and the reports it prepares, is also important in terms of investors, lenders and business owners. The aim of this study is to determine whether institutional investors are influenced by independent audit practices and the results of their investment decisions, and if so, how effective they are. In this study, firstly information about institutional investors is given and the factors affecting investment decisions are mentioned. Later, information on auditing was included. In the last part of the study, a questionnaire was applied to the managers of institutional investors consisting of banks, brokerage houses, investment trusts and portfolio management companies registered in the Turkish Capital Markets Association (TCMA) to investigate whether any independent auditing practices and results had any effect on investment decisions of institutional investors. As a result of the analyzes made, it has been determined that institutional investors consider the independent audit report and its results together with the investment decisions of the independent audit financial tables and have effects on their decisions.

Suggested Citation

  • Atila Karkacier & Fatih Coskun Ertas, 2017. "Independent Auditing Effect on Investment Decisions of Institutional Investors," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 16(3), pages 297-319, September.
  • Handle: RePEc:ami:journl:v:16:y:2017:i:3:p:297-319
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    Citations

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    Cited by:

    1. Tereshchenko Maryna, 2020. "Conducting an audit using system modeling tools in the development of deposits of flux raw materials," Technology audit and production reserves, Socionet;Technology audit and production reserves, vol. 4(4(54)), pages 4-8.

    More about this item

    Keywords

    Institutional Investor; Investment Decisions; Independent Audit;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

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