Common auditors and cross-country M&A transactions
Journal of International Financial Markets, Institutions and Money
© 2017 Elsevier B.V. All rights reserved.
Reason for embargo
Under embargo until 7 April 2018 in compliance with publisher policy
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.
This is the author accepted manuscript. The final version is available from Elsevier via the DOI in this record
Published online 7 April 2017