THE INFLUENCE OF THE CORPORATE GOVERNANCE MECHANISMS AND AUDIT FEES ON THE FINANCIAL PERFORMANCE MEASURED WITH ROA

Abstract

Through this paper we aim to highlight the importance of corporate governance and audit fees, as well as the implications of these two elements in analyzing the financial performance. There are several studies investigating the performance of the company, especially papers which identify the characteristics of the company that lead to performance. We chose to highlight the manner in which elements such as: the size and independence of the Board, the frequency of meetings between Board members, CEO duality, advisory committees, institutional investors, indemnities granted to the Board and audit fees influence the financial performance of companies listed on the Bucharest Stock Exchange in the period 2009-2015. This study provides conclusive empirical evidence on the relationship between corporate governance characteristics, audit and performance and reflects the economic and financial realities of the most important companies in Romania. Further to our research, we have obtained a significantly positive influence between the independence of the Board, the existence of institutional investors, the percentage of shares held by the members of the Board and the performance of the company. Among the variables: audit fees, financial risk and financial performance we obtained a negative correlation.

Keywords

• corporate governance
• board of directors independence
• institutional investors
• audit fees
• performance
• ROA.