Impact of corporate governance and audit quality on financial performance: listed vs. unlisted Tunisian companies

The paper aims to analyse the impact of governance mechanisms and external audit quality on the financial performance of listed and unlisted Tunisian companies in a post-revolutionary context. Using panel data econometric model, the results show that board size affects differently the performance of listed and unlisted firms. Institutional ownership affects positively listed firm performance, whereas the variables related to the audit affect only unlisted firm performance. These findings lead us to confirm that in a post-revolutionary context, listed companies have resorted to debt to mitigate losses incurred by economic instability. The political uncertainties and the fragility of the judicial system that characterised Tunisia during the period of democratic transition have negatively affected investors' confidence in auditors. Consequently, Tunisian listed companies substitute external audit quality with other governance mechanisms like board size and institutional ownership. However, post-revolutionary context doesn't affect the impact of audit quality on the unlisted firms' financial performance characterised principally by family ownership. The study results could guide future regulatory initiatives in developing appropriate mechanisms to improve performance in Tunisia and countries having similar political and economic environments.