The Economic Consequences of Financial Restatements: Evidence from the Market for Corporate Control

• 成果类型: Article
• 署名作者: Amel-Zadeh, Amir; Zhang, Yuan
• 署名单位: University of Cambridge; University of Texas System; University of Texas Dallas
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr-50869
• 发表日期: 2015
• 页码: 1-29
• 关键词: internal control deficiencies; earnings quality; TAKEOVER TARGETS; accounting restatements; Ownership structure; INFORMATION; cost; disclosure; accruals; mergers

摘要

This paper investigates whether and how financial restatements affect the market for corporate control. We show that firms that recently filed financial restatements are significantly less likely to become takeover targets than a propensity score matched sample of non-restating firms. For those restating firms that do receive takeover bids, the bids are more likely to be withdrawn or take longer to complete than those made to non-restating firms. Finally, there is some evidence that deal value multiples are significantly lower for restating targets than for non-restating targets. Our analyses suggest that the information risk associated with restating firms is the main driver of these results. Overall, this study finds that financial restatements have profound consequences for the allocation of economic resources in the market for corporate control.