ABSTRACT

We find that acquiring firm’s accounting conservatism positively affects the likelihood of targets fulfilling their performance commitments in valuation adjustment mechanism (VAM) contracts in merger and acquisition (M&A) deals. The effect is more pronounced when the acquirer is in a high-competition industry and audited by non-Top eight accounting firms and the deal is cross-region. Further tests show that accounting conservatism increases the likelihood of fulfilment by lowering the targets’ promised standards and increasing managers’ incentive to motivate and monitor targets’ managers after M&A. Finally, the performance of conservative acquirers is better after VAM contract expires.

摘要

我们发现，收购公司的会计保守主义对并购交易中目标公司履行其在估值调整机制（VAM）合同中的业绩承诺的可能性有积极影响。当收购方处于竞争激烈的行业且由非前八名会计师事务所审计且交易是跨地区的时，这种影响更为明显。进一步的测试表明，会计保守主义通过降低目标的承诺标准和增加管理者在并购后激励和监督目标管理者的动机来增加实现的可能性。最后，对赌合约到期后，保守收购方的表现较好。