The Effect of Annual Independent Audit Reports on Stock Market Performance: Evidence from Turkey and Germany

Abstract

In today's world, innovations in the field of industry, technology and logistics are destroying the borders of countries and it is becoming more complicated and difficult to make an economic decision in globalized world. The accuracy and reliability of information related with companies have become more important for indi-vidual and institutional investors. The independent audit-ing firms evaluate the financial information of the enter-prises whether they include any problems, irregularities, errors and frauds according to predetermined criteria, and presents the result to the use of the third parties. Existing and potential investors benefit from audit reports in their decisions. In this study, the impacts of audit reports on financial markets and investors in Turkey and German stock markets have been studied by Case Study Analysis. According to the findings, although there are statistically significant results in both markets, the effect lasts shorter in the German stock market than Turkey.