Chircop, Justin and Tarsalewska, Monika and Johan, Sofia (2018) Common auditors and cross-country M&A transactions. Journal of International Financial Markets, Institutions and Money, 54. pp. 43-58. ISSN 1042-4431
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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.