SEC Comment Letters on Form S-4 and M&A Accounting Quality

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dc.contributor.authorJohnson, Breten
dc.contributor.authorLisic, Lingen
dc.contributor.authorMoon, Joonen
dc.contributor.authorWang, Mengmengen
dc.date.accessioned2021-10-13T18:05:03Zen
dc.date.available2021-10-13T18:05:03Zen
dc.date.issued2021-10-13en
dc.date.updated2021-10-13T18:05:01Zen
dc.description.abstractPrior research on SEC comment letters has almost exclusively focused on reviews of periodic filings, such as 10-Ks. Transactional filing reviews, such as those related to mergers and acquisitions (M&A), are a fundamental priority of the SEC and to which it dedicates significant resources. We help fill the void in the literature by examining the influence of SEC comment letters on one type of transactional filing, Form S-4, on the accounting quality of the newly merged entity. We find that S-4s that receive an SEC comment letter are less likely to have a restatement or a goodwill impairment after the M&A deal is completed. Our inferences remain the same using either an entropy-balanced sample or a propensity-score-matched sample based on firm and deal characteristics. These results are stronger for S-4 comment letters with higher intensity and M&A- specific comments. Finally, to explore plausible mechanisms and provide further context, we examine specific disclosure changes in S-4 amendments filed during the filing review process and find evidence that the improved M&A accounting quality is related to revisions to the pro forma financial statements, the total purchase price, and goodwill allocations. Overall, our findings provide evidence on the effectiveness of the SEC’s comment letter process related to M&A deals.en
dc.description.versionAccepted versionen
dc.identifier.urihttp://hdl.handle.net/10919/105290en
dc.language.isoenen
dc.rightsIn Copyrighten
dc.rights.urihttp://rightsstatements.org/vocab/InC/1.0/en
dc.subject1501 Accounting, Auditing and Accountabilityen
dc.subjectAccountingen
dc.titleSEC Comment Letters on Form S-4 and M&A Accounting Qualityen
dc.title.serialReview of Accounting Studiesen
dc.typeArticle - Refereeden
dc.type.dcmitypeTexten
dc.type.otherArticleen
dcterms.dateAccepted2021-09-06en
pubs.organisational-group/Virginia Techen
pubs.organisational-group/Virginia Tech/Pamplin College of Businessen
pubs.organisational-group/Virginia Tech/Pamplin College of Business/Accounting and Information Systemsen
pubs.organisational-group/Virginia Tech/All T&R Facultyen
pubs.organisational-group/Virginia Tech/Pamplin College of Business/PCOB T&R Facultyen

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