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.
Highlights
Sustainability describes the ability to maintain various systems and processes—environmentally, socially, and economically—in order to give more consideration to the environment
The information regarding the deals representing M&As was collected from the Zephyr database; financial information was collected from Orbis database
The sample was mainly characterized by minority acquisitions, 97.75% of the M&A transactions representing purchases of noncontrolling stakes
Summary
Sustainability describes the ability to maintain various systems and processes—environmentally, socially, and economically—in order to give more consideration to the environment. There is the responsibility for the impact that the organization exerts on environment, community and society as a whole, in both business and social terms [1]. In the quest for a sustainable environment, various professionals should develop interdisciplinary solutions for the problem raised by the jobs, communities and workforces, transformed by technological and economic forces [2]. An auditor’s role in this matter, as part of being a professional that can offer solutions, is to identify the problems and to express an opinion on them, in order for the companies to act more responsibly. The sustainable approach of the companies involved in M&As is a matter that concerns both the acquirers and the targets involved. The main focus of research in the area concerns two directions
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