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Rethinking the Role of M&As in Promoting Sustainable Development: Empirical Evidence Regarding the Relation Between the Audit Opinion and the Sustainable Performance of the Romanian Target Companies

Roxana Manuela Dicu (), Ioan-Bogdan Robu (), George-Marian Aevoae () and Daniela-Neonila Mardiros ()
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Roxana Manuela Dicu: Faculty of Economics and Business Administration, Alexandru Ioan Cuza University of Iasi, 11 Carol I, 700506 Iaşi, Romania
Ioan-Bogdan Robu: Faculty of Economics and Business Administration, Alexandru Ioan Cuza University of Iasi, 11 Carol I, 700506 Iaşi, Romania
George-Marian Aevoae: Faculty of Economics and Business Administration, Alexandru Ioan Cuza University of Iasi, 11 Carol I, 700506 Iaşi, Romania
Daniela-Neonila Mardiros: Faculty of Economics and Business Administration, Alexandru Ioan Cuza University of Iasi, 11 Carol I, 700506 Iaşi, Romania

Sustainability, 2020, vol. 12, issue 20, 1-17

Abstract: External growth strategies face crucial barriers when taken into consideration for investing if the involved companies are not audited. The integrity of a company’s financial information, its control systems, and its sustainable behavior represent cornerstones when participating in mergers and acquisitions (henceforth M&As). Thus, the audit function became a must and its role increased over the years, becoming an intrinsic part of faithfully disclosing financial and nonfinancial information (sustainable reporting included). M&As are ideal when the need for rapid innovation is required, in order to maintain or develop a sustainability policy. Given the environmental issues, we analyzed a sample of 1491 target companies listed on Bucharest Stock Exchange, clustered into three categories: polluters, medium polluters, and low polluters. The study reveals that the investors’ decision to purchase a certain amount of stake in target companies is influenced by the audit opinion and the sector in which they operate, depending on their pollution status.

Keywords: auditing; sustainability; sustainable performance and reporting; M& A transaction; Romanian target companies (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
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