Target Financial Reporting Quality and M&a Deals That Go Bust
HOLLIS A. SKAIFE, University of Wisconsin–Madison DANIEL D. WANGERIN, Michigan State University
1. Introduction This study investigates whether target ﬁrms’ ﬁnancial reporting quality affects the likelihood that merger and acquisition (M&A) deals will ultimately be terminated. Managers looking to increase their market share, enter new markets, or diversify their operations will consider acquiring another company based on the company’s performance, geographic locations, and lines of business, respectively. If the potential target is a U.S. publicly traded company, an acquirer’s initial assessment of the expected beneﬁts associated with the acquisition of the company is based …show more content…
* Accepted by Dan Segal. We appreciate the comments and suggestions of Dan Segal, an anonymous reviewer, Xia Chen, Jeremiah Green, Antonio Macias, David Veenman, Terry Warﬁeld, participants at the 2010 AAA annual meeting, and workshop participants at the University of Amsterdam, University of California–Irvine, University of Edinburgh, Santa Clara University, and the University of Wisconsin– Madison.
Contemporary Accounting Research Vol. 30 No. 2 (Summer 2013) pp. 719–749 Ó CAAA