A Study On The Impact Of Internal Control To The Performance Of Mergers And Acquisitions Of Listed Company

As the global economic instability, the enterprises are required to establish sound internal control system for risk management and control facing all kinds of risks in their development and competition progress. The Merger & Acquisition activities, as an important means of enterprise development and competition, are also facing a lot of risks. For enterprises, the purpose of Merger & Acquisition is to achieve their expansions, access to resources and enhance the core competitiveness, all of which are based on the realization of the performance of Merger & Acquisition. And the performance of Merger & Acquisition has direct relationship with the success of Merger & Acquisition. Therefore, the study on the impact of internal control to the performance of mergers and acquisitions, which is"whether a reasonable internal control can effectively prevent and control the risk and increases the performance of Merger & Acquisition", has an important theoretical meaningful and realistic significance.This dissertation focuses on the internal control and the performance of Merger & Acquisition on the basis of a comprehensive review of related studies. It studied and explored the impact and differences of internal control and its composed factors to the performance of Merger & Acquisition, using the latest accomplishments of the internal control and Merger & Acquisition theories, and integrated research methods of theoretical analysis and empirical analyses, rounding the subject of " the impact of internal control to the performance of mergers and acquisitions ".This article first established theoretical analysis framework about the impact of internal control and its factors to the performance of Merger & Acquisition and researched and examined the mechanisms and path choice in the risk management perspective. It respectively discussed the impact mechanisms of all five factors(internal environment, the risk assessment, control activities, information and communication, internal supervision)to the performance of Merger & Acquisition in accordance with"Internal Control Basic Norms for Chinese Enterprises", identified and studied the pathway chosen based on the divided process of Merger & Acquisition. Secondly, it established internal control appraisal target system using the method of content analysis, and came to internal control comprehensive score and the factors scores providing data support for the following studies. Then, it empirically tested whether the performances of Merger & Acquisition have significant differences between the companies with internal control own assessment report and without it, and between the companies with internal control certificated report and without it in the motherboard companies of Shanghai and Shenzhen market in 2007-2009.The results show that the Merger & Acquisition performances of the enterprises which disclosed the internal control own assessment report and certificated report are better than those not. Finally, through empirical study of the impact of internal control and its factors to the performance of Merger & Acquisition, it found that the listed companies with higher internal control score have better trade and integrate performance. All of the factors of internal control have positive impact on performance, while different factors have different impact.