Research On The Performance Of Accounting Firm Merger And Integration

A merger or joint is to make public accounting firms achieve scale development,it is the main way to become bigger and stronger.Since the 20th century,our country has experienced four public accounting firm merger waves:Decoupling reform from 1998 to1999;2000,in response to theaccession to the WTO of government-led consolidation;since 2005,the two certified public accountants voluntary merger waves.From the perspective of the consolidation of the first two mergers,public accounting firm mergersexistmore ela and formalized,resulting in many merger failures.Investigating the root reason,it is mainly led by the policy guidancecompletely,merging only achieves the simple sum of resource,the merged public accounting firms without effective integration bring theinconsistent internal development strategy,imperfect quality control system,uncoordinatedposition distribution and cultural conflict,resulting in "the form matches,the essence not matches".According to the theory of value creation,merging itself does not create any value,it can only realize the transfer or assignment of core resources,the integration after the merger is the key to obtain or promote the core competence of the accounting firms.Totally different from the policy guidance of the first two merger waves,since 2005,public accounting firm mergers reflectthe transition of the motivation,it not only shows the atmosphere of the policy guidance,but also faces unprecedented pressure of the competition,public accounting firms take seriously to make decisions and choose the combining object,also paymore attention to the integration and seek the connotation development way of differentiation.Sohow is the consolidation effect of public accounting firms after the merger?The allocation of resources can be optimized and the core ability can be strengthened?How does the allocation of core resources after the mergerhave an effect on the firm performance?We must further consider these problems.In thisview,this paper usespublic accounting firm mergersfrom 2005 to 2012 as the research object,using a-share listed companies as original samples,the window period for three years,we focus on the study of the merger and integration performance whichexist rare achievement own.It not only opensthe "black box" of the integration after the merger,but alsoreveals the "contribution" and effects of a variety of of aspects to thefirm performance.Specific content is as follows:The first chapter is the introduction,mainly introduces research background,research significance of this paper,and the main concept of this paper that involves performance,accounting firm merger,integration after merger,merger and consolidation performanceetc.on this basis,introduces the research content and methods.Finally,we list the main innovation points in this paper.The second chapter is the literature review,According to the paper research thought,this chapter systematically combsfirm performance evaluation index,the micro factors that influence the firm performance,the public accounting firm merger effect and the integration after the firm merger.In addition,puts forward possible research opportunities and research emphasis in this paper.The third chapter isthe theoretical analysis andbackground,basedon the industrial organization theory,scale economy theory,resource-based theory and enterprise competence theory,the chapter combes the running mechanism of the firm performance changes and the system framework of the consolidation process.On this basis,according to the requirements of our current background and tasks,discusses the development direction of accounting firms.The fourth chapter is the firm merger,mergerstrategy and performance,overall discusses the combined effect of the accounting firm merger,we empirically test the change of the firm performance after the merger and the differences under different merger strategy.Due to thedifferent reputation and integration ability of different merger objects,the performance will show different characteristics.The positive impact will take some time to emerge,so further to explore the gradual change of the firm performancewithin three years after the merger.The fifth chapter is the firm merger,industry specialization and performance,analyzes the differences and relationship between industry specialization andindustry market forces,on this basis,we empirically test the change of industry specialization investment level after the merger,and the industry specialization impact on the firm performance,in order to test whether industry specialization strategy after the merger can promote the scale effect.The sixth chapter is the firm merger,signature CPA configuration and performance,empiricallytests the change of signature concentration and signature combination reset ratio after the merger,the combined effect of signature CPA configuration on the firm performance after the merger,as well as the differences under different merger strategy,in order to provide empirical evidence for the firmstaffing and internal management.The seventh chapter is the firm merger,signature CPA individual ability and performance,signature CPA can be divided into partners signature CPA and project director,empiricaly tests the change of the individual experience and industry expertise,the combined effect of the signature CPA individual ability on the firm performance after the merger,as well as the differences under different merger stragety.In the further study,compares and analyzes the influence of partner signature CPA individual ability on the firm performancebefore and after the merger.The eighth chapter isthe firm merger,customer portfolio management and performance,empiricallytests the preferences choice about different customers on risk levels and the deep reasons for this change after the merger,in order to investigate the material misstatement risk control.In addition,inspectsthat the customerswhich changes to smaller public accouting firms bring the adjustments of audit quality and audit fees after the merger,exploring the impact of customer portfolio management on the audit market efficiency.The ninth chapter is the conclusions and policy recommendations,summarizes the results of the theoretical analysis and empirical tests,puts forward the countermeasures and suggestions,and points out that the limitations and the direction of the future research.The main innovation is:from the research perspective,the paper tries to combine the merger effect beween the public accouting firms with the integration effect after the mergerorganically,focuses on the effect of the accounting firm merger and integration.Existing literature is more directly to discuss the combined effects of the accounting firm mergers,regards the integration after the merger as a "black box",confusing the differences and relationship between the combined merger effect and the integration effect,ignores the differences of a variety ofintegrations,so the conclusion is too general,the lack of separation effect research also causes the conclusionsinconsistent.The paper systematically combines the merger effect with the integration effect after the merger organically,further studys the integration process,reveals the "black box,and running mechanism,tests the effect of the integration empirically,making up the missing research about the integration effect after the merger.From the point of the research content,according to "merge-core resources-the core competence-audit market efficiency" path,merging itself can only transfer or assign the core resources,If public accounting firms would build,expand and strengthen core ability,truly achieve synergies,promote the audit marketefficiency,They willintegrate the core resources obtained by the merger effectively.Therefore,from industry specialization,signature CPA configuration,signature CPA individual ability and customer portfolio management,thepaper systematically discusses the change of core competence or resource allocation and the influence of different resource allocation on the firm performance after the merger,stripping out the "contribution" of a variety of aspects from the combined merger effectsto the firm performance,reveals the internal driving factors in the relationship of "merge-efficiency",providing empirical evidence how to conduct resources allocation effectively in the process oflarge scale,give full play to the value creation of the core resource and competitive advantage.From the point of study indicators,the two methods of the measure of industry specialization level have obvious differences,which will cause substantial impact on the research conclusion.At present there are few scholars that discuss the differences of the two methods,the use of empirical research is relatively chaos,it is one of the reasons that the current research conclusion is inconsistent.Based on the analysis of the differences and relations of the two methods,empiricallytest the influence difference of two methods onthe firm performance,find that the industry specialization audit market in China is still in its early stages,the market share can’t reflect the firm’s audit experience and industry specialization level,industry portfolio share method is used more appropriate,further enrich the study of related aspects of industry specialization.From the point of research time,the paper expands the sampling period of the mergers,enriches the researches on the integration effect after the merger.After expansion,on the one hand,the consolidation effect takes some time to emerge after a period of time.Merger effect on the firmperformancemay be a certain hysteresis.on the other hand,due to poorer matching and fusion of the culture and management system on both sides,merger may have a positive effect in the short term,but not continuous.Therefore,this paper chooses three years before and after the merger as study period,examines the effects of accounting firm mergers on the perfomancegradually,reflecting the change of the integration process,tries to provide empirical evidence for real "bigger and stronger".