Abstract
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.
Original language | English |
---|---|
Pages (from-to) | 43-58 |
Number of pages | 16 |
Journal | Journal of International Financial Markets, Institutions and Money |
Volume | 54 |
Early online date | 7 Apr 2017 |
DOIs | |
Publication status | Published - May 2018 |