Effects of Inspections Done by Capital Market Board on Share Returns (2000-2018 Period Analysis)
Abstract
Because of the realization of the fact that manipulations were being done on financial reports of the biggest countries both in the US and in the rest of the world such as Long Term Capital Management in 1998, Enron in 2001, and Lehman Brothers in 2008, the importance of independent auditing and corporate governance understanding increased. 99.9% of businesses operating in our country are in small and mid-scale business status. This fact makes the adoption of independent auditing and corporate governance understanding harder. Therefore, the prevention the use of methods that blocks competition in the market, Capital Markets Board was founded. The purpose of this study is to find out the effects of auditings done by CMB from 2000 to 2018 on stock returns. Another result of this research is to find out whether BIST is strong in semi-strong form or not. Data on auditing done by CMB was acquired from CMB’s weekly bulletins. As a result of the analysis made using the event study method, it has been concluded that it affects the stock returns negatively. In addition, it is also possible to obtain higher returns compared to the BIST-100 index returns using this information and therefore, BIST was not effective in semi-strong form.
Keywords
Capital Markets Board, event study, market effective in semi-strong form, abnormal return, auditing
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