Examining the Effect of Related Party Transactions on the Value of the Enterprise Within the Scope of ISA 550: The Case of ISBANK
摘要
Related partyISA 550 transactionsRelated party transactions refer to the commercial transactions of a financial nature that economic institutions conduct with institutions or organizations that they are directly or indirectly affiliated with, such as partnerships, management, shareholders or in other ways. Such transactions are likely to produce results that do not reflect the truth in the financial reports of the enterprises. This situation increases the concerns of the stakeholdersStakeholders and may affect their decisions regarding the enterprise. In this study, the effects of related party transactions on the market value of the enterprise within the scope of International Standard on Auditing 550 (ISA 550) were analyzed using the event study methodEvent Study Method. In the study, the related party transactions carried out by ISBANK, the leading financial institution of Turkey, in the 2019 period and reported to the Public Disclosure Platform (KAP) were evaluated. The enterprise reported a total of seven related party transactions in the 2019 period and all of the transactions were carried out with ISGYO. ISBANK has a 50.51% share in İŞGYO and the transactions to be carried out between the enterprises are qualified as related party transactions. In the evaluated period, loans and leasing transactions were generally carried out between the parties. According to the findings, it has been determined that ISBANK, which is the creditor or tenant company in non-cash loan and leasing transactions, negatively affects the market value of the company; on the other hand, cash loan transactions produce positive results in the market value of the company. The relevant transactions have produced different results for ISGYO. Accordingly, it has been determined that leasing transactions increase the market value of the company, while cash and non-cash loan transactions affect it in the opposite direction. The direction in which transactions between related parties affect the decisions of stakeholders varies depending on whether the company is the provider of the relevant transaction or not. The study has revealed that related party transactions have a strategic importance on the decisions of stakeholdersStakeholders. The results of the study are similar to the findings of the literature, and it is seen that related party transactionsRelated party transactions affect the market value of the companies. In this context, it is important for companies to act by taking into account the direction and level of the impact of related party transactions on the decisions of stakeholdersStakeholders. Finally, although the number of events analyzed and evaluated is sufficient, the fact that all of the events belong to a company and a certain period constitutes the limitations of the study.