Shared auditors in mergers and acquisitions

• 成果类型: Article
• 署名作者: Dhaliwal, Dan S.; Lamoreaux, Phillip T.; Litov, Lubomir P.; Neyland, Jordan B.
• 署名单位: University of Arizona; Korea University; Arizona State University; Arizona State University-Tempe; University of Oklahoma System; University of Oklahoma - Norman; University of Melbourne
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2015.01.005
• 发表日期: 2016
• 关键词: sample selection; propensity score; INDEPENDENCE; geography; client; gains; fees; INFORMATION; disclosure; targets

摘要

We examine the impact of shared auditors, defined as audit firms that provide audit services to a target and its acquirer firm prior to an acquisition, on transaction outcomes. We find shared auditors are observed in nearly a quarter of all public acquisitions and targets are more likely to receive a bid from a firm that has the same auditor. Moreover, these shared auditor deals are associated with significantly lower deal premiums, lower target event returns, higher bidder event returns, and higher deal completion rates. These results are driven by bids in which targets and acquirers share the same practice office of an audit firm and in which the target is small. Overall, our evidence suggests that bidders benefit from sharing an auditor with the target. Our results are robust to controls for alternative explanations and for selection bias in the shared-auditor effect. (C) 2015 Elsevier B.V. All rights reserved.