PCAOB international inspections and Merger and Acquisition outcomes

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This study examines how PCAOB international inspections of non-U.S. auditors affect international Merger and Acquisition (M&A) outcomes. We find that clients of inspected auditors are more likely to become acquisition targets after the public disclosure of auditor's inspection report. We also find that deal completion is more likely and deal announcement returns are higher if deals involve targets with auditors for which inspection reports are available. Engagement deficiencies and unremediated quality control deficiencies identified in inspection reports weaken the positive effect of PCAOB oversight on M&A outcomes. Collectively, our results suggest that PCAOB oversight reduces information uncertainty in M&A deals.
Publisher
ELSEVIER
Issue Date
2020-08
Language
English
Article Type
Article
Citation

JOURNAL OF ACCOUNTING & ECONOMICS, v.70, no.1, pp.101318

ISSN
0165-4101
DOI
10.1016/j.jacceco.2020.101318
URI
http://hdl.handle.net/10203/276073
Appears in Collection
MT-Journal Papers(저널논문)
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