Using a comprehensive sample of cross-country mergers and acquisitions for the period 2000–2014 we examine the effect of common auditors on the efficiency of cross-country M&A transactions. We predict that the use of common auditors reduces uncertainty, resulting in higher M&A efficiency. We find that this common-auditor effect results in a positive market reaction to the M&A announcement, lower premium and greater increase in return on assets following the M&A transaction. Further, we find that these effects are more pronounced the greater the M&A transaction uncertainty and when the accounting standards of parties differ.
|Number of pages||16|
|Journal||Journal of International Financial Markets, Institutions and Money|
|Early online date||7 Apr 2017|
|Publication status||Published - May 2018|
Chircop, J., Johan, S., & Tarsalewska, M. (2018). Common auditors and cross-country M&A transactions. Journal of International Financial Markets, Institutions and Money, 54, 43-58. https://doi.org/10.1016/j.intfin.2017.04.001