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The Impact Of Corporate Governance On The Restructuring Operations Of Audited Entities

Author

Listed:
  • Berinde Sorin

    (Universitatea Babes Bolyai, Facultatea de Business)

  • Rachisan Paula Ramona

    (Universitatea Babes-Bolyai, Facultatea de Business)

Abstract

The study is based on public information provided by the National Trade Register Office regarding all audited entities within the county of Cluj. In accordance with the legal provisions, the audited entities must notify, in case they meet the legal requirements, if they contract financial audit jobs. The processed information refers to the connection of the management's nature and the source of the capital for these entities with the frequency of the changes occurred in the structure of the entity and/or of the social capital. Operations of such nature, considered for the period 2005-2012, refer on one side to absorption mergers, dissolutions without liquidation followed by merger, partial divisions and transfer of the audited entity's headquarters in other counties (positive operations) and on the other side to operations of liquidation, insolvency, dissolution followed by liquidation, temporary suspension of activity for a maximum period of 3 years (negative operations). Positive operations are considered by authors to have as an impact the optimization of the indicators of financial position and/or performance, and the negative operations as those unlikely to meet the principle of activity continuity. The study aims to determine whether there is a correlation between a certain type of corporate governance on one side and the frequency of the two categories of changes in the structure of the activity and/or of the social capital. Conclusions are relevant for at least two reasons: the study is exhaustive, there have been taken into consideration all the audited entities in the county of Cluj and, moreover, the analyzed period is very expansive (the last seven financial years). On the other hand, from the previous studies it appears that within audited entities there is a higher preponderance of foreign management in comparison with a more moderate foreign investment. Relevant in this respect are the findings regarding the nature of the changes in the structure of the activity and/or of the social capital within the audited entities where there is an overlap between the foreign governance and the foreign investment.

Suggested Citation

  • Berinde Sorin & Rachisan Paula Ramona, 2013. "The Impact Of Corporate Governance On The Restructuring Operations Of Audited Entities," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 1300-1309, July.
    • Handle: RePEc:ora:journl:v:1:y:2013:i:1:p:1300-1309
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    References listed on IDEAS

    as
    1. Dan Ioan Topor & Alina Putan & Sorinel Capusneanu, 2011. "The Role of Management Accounting in Providing Information for Making Decision Within an Entity," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 1(2), pages 56-66, December.
    2. Ian Fraser & Chris Pong, 2009. "The future of the external audit function," Managerial Auditing Journal, Emerald Group Publishing, vol. 24(2), pages 104-113, January.
    3. Prem Sikka & Steven Filling & Pik Liew, 2009. "The audit crunch: reforming auditing," Managerial Auditing Journal, Emerald Group Publishing, vol. 24(2), pages 135-155, January.
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    More about this item

    Keywords

    corporate governance; audited entities; restructuring operations; foreign investment; social capital;
    All these keywords.

    JEL classification:

    • 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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