Common auditors and cross-country M&A transactions

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 the transacting parties differ.

Do venture capital firms benefit from international syndicates?

“…We therefore adopt their methodology and include a dummy variable in our performance analysis that controls for the presence of common auditors. Consistent with Chircop et al (2017), we find that common auditors have a positive impact on exit performance, but this impact is only significant at the 10% level. However, this dummy variable does not affect our conclusions on the impact of foreign syndicate experience.…”

Retaliation Effectiveness and Acquisition Performance: The Influence of Managerial Decisions and Industry Context

“…In Figure 1, we separately identify internal and external characteristics linked to retaliation effectiveness, with more effective retaliation lowering acquisition performance. Internally, an open merger and acquisition (M&A) strategy and integration duration can increase retaliation effectiveness during acquisition integration (Chircop, Johan and Tarsalewska, 2018; Graebner et al ., 2017; King, Bauer and Schriber, 2018; Teerikangas and Thanos, 2018; van Marrewijk, 2016; Wei and Clegg, 2018). Externally, industry M&A activity and rivalry may influence retaliation effectiveness (Bauer et al ., 2017; Bettinazzi et al ., 2020; Haleblian et al ., 2012; Martynova and Renneboog, 2008).…”

“…Meanwhile, research consistently reveals that acquisition characteristics have limited predictive power for how acquisitions perform (King et al ., 2004, 2020). One reason for a disconnect between predicting acquisition performance from deal characteristics is that the improved acquisition performance depends on events after closing a deal, or during integration (Chircop, Johan and Taralewska, 2018; Graebner et al ., 2017; Haspeslagh and Jemison, 1991; Teerikangas and Thanos, 2018; van Marrewijk, 2016; Wei and Clegg, 2018).…”

An Analysis of the Current Situation of the Research on the Influencing Factors of M & A Performance of Listed Companies

“…Compared with the financial adviser without "relationship", the financial adviser with "relationship" can significantly improve the M & A performance, and the degree of closeness of the relationship is positively correlated with the M & A performance [22]. From the perspective of auditor, the joint auditor employed by both parties can effectively alleviate the degree of information asymmetry, reduce the uncertainty of M & A transactions and improve M & A performance [23]. In addition, in non-linked M&As, auditors can use their professional capabilities to reduce information asymmetry, thereby significantly improving M&A performance [24].…”