本文精选了会计学领域国际顶刊《Journal of Accounting and Economics》近期发表的论文，提供会计学领域最新的学术动态。

Litigation risk and strategic M&A valuations

原刊和作者：

Journal of Accounting and Economics Volume 78, Issue 1

Claudia Imperatore （Bocconi University）

Gabriel Pündrich （University of Florida）

Rodrigo S. Verdi （MIT）

Benjamin P. Yost （Boston College）

Abstract

We study the role of litigation risk in M&A valuations. Specifically, we hypothesize that litigation risk leads to strategic valuations in fairness opinions (FOs) obtained in M&A transactions. Employing a regulatory shock to merger litigation risk and focusing on the most common valuation techniques – peer firm comparables and DCF analysis – we find that target-sought FOs exhibit lower valuations when litigation risk is high. The effect is concentrated in deals with greater agency conflicts between target management and outside shareholders. Furthermore, downward-biased valuations reduce appraisal litigation but are also associated with lower premiums. In contrast to prior work suggesting that target-sought FOs are used to negotiate a higher takeover price, our findings imply that they are used, at least in part, to mitigate litigation risk and facilitate successful deal completion. Our findings are relevant to academics, practitioners, and regulators interested in M&A price formation, and highlight the role litigation plays therein.

Link: https://doi.org/10.1016/j.jacceco.2024.101671

Rank-and-file accounting employee compensation and financial reporting quality

原刊和作者：

Journal of Accounting and Economics Volume 78, Issue 1

Christopher S. Armstrong （Stanford University）

John D. Kepler （Stanford University）

David F. Larcker （Stanford University）

Shawn X. Shi （University of Washington）

Abstract

We use a proprietary database with detailed, employee-specific compensation contract information for rank-and-file corporate accountants who are directly involved in the financial reporting process to assess their influence on their firms' financial reporting quality. Theory predicts that paying above-market wages can both attract employees with more human capital and subsequently encourage better performance. Consistent with audit committees structuring accountants' compensation to mitigate financial misreporting that might otherwise occur, we find that firms with relatively well-paid accountants tend to issue higher-quality financial reports. Moreover, this relationship is more pronounced when firms’ senior executives have stronger contractual incentives to misreport and when the audit committee is more independent from management.

Link: https://doi.org/10.1016/j.jacceco.2024.101672

Fraudulent financial reporting and the consequences for employees

原刊和作者：

Journal of Accounting and Economics Volume 78, Issue 1

Jung Ho Choi （Stanford University）

Brandon Gipper （Stanford University）

Abstract

We combine U.S. Census data with SEC enforcement actions to examine employees' outcomes, such as wages and turnover, before, during, and after periods of fraudulent financial reporting. We find that fraud firms’ employees lose about 50% of cumulative annual wages, compared to a matched sample, and the separation rate is much higher after fraud periods. Yet, employment growth at fraud firms is positive during fraud periods; these firms overbuild and hire new, lower-paid employees concurrent with the fraud, unlike firms in distress which tend to contract. When the fraud is revealed, firms shed workers, unwinding this abnormal growth and resulting in most of the negative wage consequences. Wage outcomes are particularly unfavorable in thin labor markets, and lower-wage employees, though unlikely to have perpetrated the fraud, experience more severe wage losses compared to higher-wage employees.

Link: https://doi.org/10.1016/j.jacceco.2024.101673

Mandatory financial information disclosure and credit ratings

原刊和作者：

Journal of Accounting and Economics Volume 78, Issue 1

Steven Vanhaverbeke （KU Leuven）

Benjamin Balsmeier （University of Luxembourg）

Thorsten Doherr （Centre for European Economic Research）

Abstract

When firms are forced to publicly disclose financial information, credit rating agencies are generally expected to improve their risk assessments. Theory predicts such an information quality effect but also suggests an adverse reputational concerns effect since credit analysts may become increasingly concerned about alleged rating failures. We empirically examine these predictions using a large-scale quasi-natural experiment in Germany, where a new compliance regime required firms to disclose annual financial statements publicly. Consistent with the reputational concerns hypothesis, we find an average increase in credit rating downgrades that is entirely driven by changes in the discretionary assessments of credit analysts rather than changes in firm fundamentals. Following public disclosure regulations, analysts tend to give positive private information less weight in their risk assessments while assigning greater weight to negative public information. A final set of results indicates that professional credit providers recognize that the resulting downgrades are not warranted.

Link: https://doi.org/10.1016/j.jacceco.2024.101676

Standing on the shoulders of giants: Financial reporting comparability and knowledge accumulation

Journal of Accounting and Economics Volume 78, Issue 1

Kevin Tseng （University of Hong Kong）

Rong (Irene) Zhong （University of Illinois at Chicago）

Abstract

This study examines whether and how financial statement comparability facilitates the dissemination of innovative knowledge between firms and stimulates the creation of new knowledge. Using cross-patent citations to track interfirm knowledge transfers, we find that comparability increases firms' incentives to learn from peers and create new patents that cite their peers' existing patents. The investigation into the mechanism reveals that comparability improves firms’ ability to estimate the monetary value of peer knowledge and predict their own financial benefits from knowledge acquisition. The impact of comparability is more pronounced when peer knowledge is more publicly accessible or of higher monetary value. Consequently, the acquired knowledge fosters follow-on innovation, enabling firms to produce more patents with greater economic significance. Evidence from two quasi-natural experiments suggests that our findings are plausibly causal. Overall, our study highlights the important role of accounting comparability in facilitating knowledge dissemination.

Link: https://doi.org/10.1016/j.jacceco.2024.101685