The external audit effect, as a governance mechanism and the financial performance on the French listed companies

الملخص EN

In this study we examine the impact of the combination of the reputation of the external audit and the various internal governance mechanisms on corporate performance.

Tests conducted on a sample of 102 companies-years and globally includes firms which entered the SBF 120 index at least once during the 2014-2016 period, and do not have financial or similar activity.

Our results show that a better reputation of the audit may not constitute a prerogative as well as for the shareholders but for the managers, explained by an effect of substitutability between the effectiveness of control exerted by certain internal mechanisms and the choice of a reputed external auditor.

Thus, our results support the substitution hypothesis between the monitoring roles played even by blockholders and by institutionals and the demand for differentiate audit quality.

On the other hand, a positive relationship is established between the predominance of external independent members in the board of directors and the audit quality demand.

, the audit carried out by BIG auditors involves costs which adversely affect the audited company's performance.

These costs are usually the result of a bad perception of the audit quality by investors.