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The Influence of Reporting Intangible Capital on the Performance of Romanian Companies

Author

Listed:
  • Cristina PRECOB

    () (Alexandru Ioan Cuza University of Iasi)

  • Marilena MIRONIUC

Abstract

The purpose of this article was to identify the correlations between intangible capital and organisational performance, for the Romanian companies quoted in the Bucharest Stock Exchange, BSE section. Intangible capital was computed based on 13 criteria grouped into three components: human capital, relational capital, and innovation, and the financial performance of the company was studied through the return on assets (ROA), the return on equity (ROE), and the economic return (Re). In this article, the financial performance for Romanian companies is reflected by the goodwill, computed as the difference between the market capitalization and the net accounting asset of an entity, as well as by the market to book value (M/BV- the ratio between the market capitalization and the net accounting asset of the company). The article also investigates the existence of a correlation between the intangible capital of Romanian companies and the auditor contracted to audit the annual financial statements. The results of research show that between intangible capital and the positive goodwill of the studied companies, on the one hand, and the economic return, respectively the market to book value, on the other hand, there are direct correlations. At the same time, the value of intangible capital is, statistically, significantly higher in companies whose financial statements are audited by Big4 auditors and in companies that record profit.

Suggested Citation

  • Cristina PRECOB & Marilena MIRONIUC, 2016. "The Influence of Reporting Intangible Capital on the Performance of Romanian Companies," The Audit Financiar journal, Chamber of Financial Auditors of Romania, vol. 14(133), pages 103-103, January.
    • Handle: RePEc:aud:audfin:v:133:y:2016:i:14:p:103
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    References listed on IDEAS

    as
    1. Brown, Stephen & Lo, Kin & Lys, Thomas, 1999. "Use of R2 in accounting research: measuring changes in value relevance over the last four decades," Journal of Accounting and Economics, Elsevier, vol. 28(2), pages 83-115, December.
    2. Claudiu-Marian Gruian, 2011. "The Influence Of Intellectual Capital On Romanian Companies' Financial Performance," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 2(13), pages 1-9.
    3. Ester Oliveras & Yulia Kasperskaya, 2004. "Reporting intellectual capital in Spain," Economics Working Papers 781, Department of Economics and Business, Universitat Pompeu Fabra.
    4. Yu-Shan Chen, 2008. "The Positive Effect of Green Intellectual Capital on Competitive Advantages of Firms," Journal of Business Ethics, Springer, vol. 77(3), pages 271-286, February.
    5. Lev, B & Zarowin, P, 1999. "The boundaries of financial reporting and how to extend them," Journal of Accounting Research, Wiley Blackwell, vol. 37(2), pages 353-385.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    intangible capital; return on assets; return on equity; economic return; market to book value; goodwill; Big Four auditor;

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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