THE IMPACT OF AUDITOR AFFILIATION ON FINANCIAL STATEMENT RELEVANCE

Radu-Daniel Loghin

SEA - Practical Application of Science, 2017, issue 15, 419-425

Abstract: The role of the audit report is to provide a level of trust to the professional judgment behind the financial statements of a company. The market for audit services is not a homogenous one, and large audit partners known as the Big 4 dominate with their partner networks in both developed and emerging markets. The scientific literature provides a rich background of studies linking auditor affiliation and auditor independence. The current exploratory paper tries to approach the issue of auditor independence and affiliation by drawing on the Ohlson model for a sample of 552 firm-year observations from the Borsa Istanbul, covering the 2014 and 2015 financial periods. The results reveal a strong correlation for the year 2015 between the Big 4 affiliation and the value of the equities, possibly suggesting a correlation between auditor independence and financial statement relevance.

Keywords: Turkey; Big4; Audit; Relevance (search for similar items in EconPapers)
JEL-codes: G32 G41 M42 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:cmj:seapas:y:2017:i:15:p:419-425

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