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  • Common auditors and cross-country M&A transactions

    Rights statement: This is the author’s version of a work that was accepted for publication in Journal of International Financial Markets, Institutions and Money. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of International Financial Markets, Institutions and Money, 54, 2018 DOI: 10.1016/j.intfin.2017.04.001

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Common auditors and cross-country M&A transactions

Research output: Contribution to journalJournal article

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<mark>Journal publication date</mark>05/2018
<mark>Journal</mark>Journal of International Financial Markets, Institutions and Money
Volume54
Number of pages16
Pages (from-to)43-58
Publication statusPublished
Early online date7/04/17
Original languageEnglish

Abstract

Using a comprehensive sample of cross-country mergers and acquisitions for the period 2000 to 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.

Bibliographic note

This is the author’s version of a work that was accepted for publication in Journal of International Financial Markets, Institutions and Money. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of International Financial Markets, Institutions and Money, 54, 2018 DOI: 10.1016/j.intfin.2017.04.001