Value relevance of financial reporting of the related party entities listed at Bucharest Stock Exchange

Annual Financial Reports do affect decision making of investors and proper performance of the capital market. This has been confirmed both by reality of the market economy and well-known financial scandals happened due to wrong accounting of the business transactions. This study follows the main goal to evaluate the relevance of the Financial Reporting as submitted by business entities based in Romania filing transactions with related parties as based on transfer prices. This target will be achieved and Design of Experiment assumptions will be validated due to panel data analysis by statistical calculations based on price model suggested by Ohlson. Calculations output has shown that earnings per share filed by related parties and book value of equity per share do significantly affect the relevance of the Financial Reporting Data. Meanwhile type of transactions filed among related entities does show a higher investors interest over entities filing transactions with affiliated ones, discounted earnings being higher in case of the inter-company loans rather than in transactions with long-term assets.