Effects of Audit Opinion on Stock Prices: The case of Croatia and Slovenia
The aim of this paper is to determine the effects of stock prices following the announcement of audited financial reports of Slovenian and Croatian public interest entities. Our research is to study the importance of variables and their significance regarding the audit in explaining the reactions of stock price movements (fluctuations). In this study we have applied discriminant analysis and logit models. Discriminant analysis and logit were performed with type of opinion as the dependent variable and eleven financial ratios as independent variables. Test results show that the audit quality, the auditor's opinion have an impact on the evolution of stock prices.
References listed on IDEAS
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- Palepu, Krishna G., 1986. "Predicting takeover targets : A methodological and empirical analysis," Journal of Accounting and Economics, Elsevier, vol. 8(1), pages 3-35, March.
- Stefan Sundgren, 1998. "Auditor choices and auditor reporting practices: evidence from Finnish small firms," European Accounting Review, Taylor & Francis Journals, vol. 7(3), pages 441-465.
- Jennifer C. Ireland, 2003. "An Empirical Investigation of Determinants of Audit Reports in the UK," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 30, pages 975-1016.
- Choi, Sung K. & Jeter, Debra C., 1992. "The effects of qualified audit opinions on earnings response coefficients," Journal of Accounting and Economics, Elsevier, vol. 15(2-3), pages 229-247, August.
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