This study investigates acquiring firms' earnings management (EM) strategies around mergers and acquisition (M&A) in the US market and analyzes firm's post-acquisition performance. Acquirers are shown to use both accruals management (AM) and real earnings management (REM), both prior to and...

The accounting literature has found evidence that acquirers in stock-for-stock M&A have typically managed earnings upwards ahead of a bid. Other literatures have concluded that, when stock prices are high and rising, M&A is higher, more M&A is financed with stock, market sentiment and...

For an M&A context, this paper investigates stock payment acquirers' trade-off strategy between accruals-based earnings management (AM) and real earnings management (REM) and it impacts on firm's post-acquisition performance during the period before and the period after the Sarbanes-Oxley Act...

Meeks and Meeks (2022, MM for short)* has a question in its subtitle, Why spend ever more on mergers when so many fail? There are three interwoven strands in the book’s answer:First, contracts (explicit and implicit) often reward key players in the M&A market — executives and advisers —...

This study tests the hypothesis that the target firms are involved in earnings management activities in quarters leading to a takeover announcement. Using a sample of 3,455 Chinese listed firms that are targets of successful acquisitions over the period 2007-2020, and for a matched sample of...

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...

How does the possibility of being taken over affect a manager’s voluntary disclosure? This paper analyzes this question in a setting where the manager’s disclosure complements the rival’s expertise and influences the probability the firm is taken over by a rival. The threat of being...

A large proportion of acquisitions results in shareholder wealth destruction. This study examines who is responsible for allowing bad acquisitions. Using a sample of 349 tax-free, stock-for-stock, pooling acquisitions over 1993-2001, the announcement period abnormal returns of acquirers are...

We examine the governance transfer effect of corporate blockholders in a sample of 892 block acquisitions across 42 countries from 1990 to 2008. Using earnings management as a proxy for corporate governance outcome, we find that target firms' earnings management is aligned with that of block...

Previous research suggests that share-financed acquirers inflate their earnings before merger and acquisition announcements. The existing literature also indicates that characteristics of chief executive officers (CEO) could affect earnings management. In this study, we extend prior studies by...