Watts (2003) and Ball and Shivakumar (2005) argue that accounting conservatism decreases managerial incentives to make negative net present value investments. I develop and test a new hypothesis that accounting conservatism is associated with managers making less risky investments. I find that...

This study examines the association between accounting profitability and takeover likelihood of a firm. Takeover likelihood is negatively associated with negative industry-adjusted ROA, and is positively associated with positive industry-adjusted ROA. The negative association is consistent with...

We provide evidence suggesting that managers use financial statement misstatements which improve reported results to facilitate acquisitions. Specifically, we find that firms misstating their financial statements are more likely to make stock-based acquisitions, but not cash-based acquisitions,...

We examine whether earnings myopia among publicly traded companies motivates private equity firms to acquire them. Using a sample of private equity takeovers, we show that multiple measures of myopia increase the likelihood of takeover by private equity buyers. In contrast, private takeovers...

This study examines whether acquirers make better acquisition decisions when target firms' financial statements exhibit greater comparability with industry peer firms. We predict and find that acquirers make more profitable acquisition decisions when target firms' financial statements are more...

Current U.S. reporting and tax laws create an incentive for some U.S. firms to avoid the repatriation of foreign earnings as the U.S. government charges additional corporate taxes on these transfers. Prior research suggests that the combined effect of these incentives leads some U.S....

We investigate the effects of the elimination of the pooling method, under SFAS 141, and of goodwill amortization, under SFAS 142, on the form of acquisition financing and on a firm's takeover probability. We find that before these accounting rules, target firms' step-up value is positively...