| Economic globalization provides the possibility and opportunities for Chinese enterprises' internationalization.According to the "Statistical Bulletin of China's Foreign Direct Investment 2019" issued by the Ministry of Commerce,as of the end of2019,China's OFDI stock reached US$2.2 trillion,which was 73.5 times of that in 2002,accounting for 6.4% of the global OFDI stock,ranking third in the world.Among them,from 2004 to 2016,our country's overseas M&A increased from 3 billion US dollars to135.33 billion US dollars.From 2017 to 2019,under the influence of the tightening of foreign investment policies and trade frictions,the amount of our country's overseas M&A continued to drop to 34.28 billion US dollars,but it still accounted for 25.04%of our country's total OFDI flows in 2019.It is not difficult to see that overseas M&A are one of the main methods of OFDI by Chinese companies.The effectiveness of overseas M&A is related to the effective implementation and promotion of the internationalization strategy of Chinese companies.Therefore,striving to improve the efficiency and effectiveness of overseas M&A,and then to achieve corporate valueadded and strategic goals,is an issue that cannot be ignored by corporate decisionmakers and government departments.As an important service organization of the capital market,accounting firms play an irreplaceable role in the wave of internationalization.In order to serve going-out strategy of Chinese enterprises better,the AICPA issued the "Opinions on Promoting the Bigger and Stronger Accounting Firms" in 2007,which clearly pointed out that "Chinese accounting firms need to make full use of their professional advantages to accompany the company's pace of going global" The audit is an important institution that eases information asymmetry in the process of business operations and improves business efficiency.At the same time,companies may also hire auditors to participate in the company's overseas M&A.So what factors will affect the selection of auditors for overseas M&A? Will the overseas business experience or expertise of the hired auditors affect the company's overseas M&A? From the perspective of the process of overseas M&A,the choice of payment methods and the confirmation of goodwill are key issues.Whether the overseas expertise of merger auditors can effectively alleviate information asymmetry,prompt the merger party to choose cash payment methods,and inhibit the confirmation of excess goodwill? Judging from the results of overseas M&A,will the provision of goodwill impairment of overseas M&A and the performance of overseas M&A also be affected by the level of overseas expertise of merger auditors?A series of questions are worthy of systematic analysis and empirical testing.In the process of overseas M&A,auditors can use their professional knowledge and experience to help companies collect and verify relevant information in all aspects of the merger process,and reduce the cost of corporate information search and decisionmaking.The expertise and experience of auditors are the key factors to enhance their competence.Compared with auditors who lack overseas business experience,when auditors have overseas expertise,they can alleviate information asymmetry in the M&A process,reduce the uncertainty and complexity of transactions,and increase the trust of both parties to the merger,thereby helping the company to effectively identify true value of the target.Therefore,for companies carrying out overseas M&A,hiring auditors with overseas expertise provides an important guarantee for ensuring the compliance of the merger process and improving the quality of M&A.So,what factors will affect the selection of auditors for overseas M&A? Will the overseas business experience or expertise of the hired auditors affect the company's overseas M&A? From the perspective of the process of overseas M&A,the choice of payment methods and the confirmation of goodwill are key issues.Whether the overseas expertise of merger auditors can effectively alleviate information asymmetry,prompt the merger party to choose cash payment methods,and inhibit the confirmation of excess goodwill?Judging from the results of overseas M&A,can merger auditors use the overseas expertise to reduce the impairment of M&A and improve the performance of overseas M&A? These issues are worthy of systematic analysis and in-depth exploration.However,at present,the role of auditors in the process of corporate overseas operations is rarely mentioned in theoretical studies.In the context of the continuous deepening of the going-out strategy by our country's accounting firms,it is of great significance and value to deeply study the impact of auditors' overseas expertise on companies' overseas M&As.Based on the background of enterprises and accounting firms going global,this article studies from the perspective of overseas M&A,and focuses on the factors affecting the selection of overseas M&A auditors,and the influence of overseas M&A auditors' overseas expertise on overseas M&A payment methods,overseas M&A goodwill and overseas M&A performance.First of all,based on a comprehensive review of domestic and foreign related documents,this article introduces the relevant institutional backgrounds of Chinese enterprises' and accounting firms' going-out strategy.At the same time,the basic concepts of this article,such as accounting firms' internationalization,overseas expertise of auditors,and concepts related to overseas M&A,are defined.And the theoretical basis of the influence of overseas expertise of merger auditors on overseas M&A in this paper is further elaborated.On this basis,research hypotheses and empirical test models are proposed.Finally,this article takes our country's overseas M&A events from 2007 to 2019 as samples,and examines the factors affecting the selection of overseas M&A auditors the relationship between the overseas expertise of M&A auditors and overseas M&A payment methods,overseas M&A goodwill and overseas M&A performance,and eventually form specific research conclusions and enlightenments.The main research conclusions of this paper are as follows.First of all,when the overseas M&A is a non-related M&A,and the country where the two parties of the overseas M&A are located has large cultural differences or low economic relevance,the acquirer is more likely to choose an M&A auditor with a higher level of overseas expertise,which indicates that the company expects to alleviate the information asymmetry in the overseas M&A process.Furthermore,the study also found that the nature of property rights,the uncertainty of the economic policy of the host country or region,and the legal system have a significant moderating effect on the above-mentioned relationship.Secondly,when the M&A auditor's overseas expertise level is higher,the acquiring party is more likely to adopt cash payment methods,which shows that M&A auditors with higher overseas expertise level can alleviate the information asymmetry in the overseas M&A process,ease financing constraints,and reduce the motivation of companies to use stock payment method to bind the risks and benefits of both parties to the merger.Further tests show that when the company's earnings management level is relatively high or analysts' forecasts differ greatly,mergers and acquisitions and annual audits are the same auditor,or the host country or region's economic policy uncertainty is greater,the positive relationship between the overseas expertise of M&A auditors and the use of cash payments is more significant.Third,when the overseas expertise of the M&A auditor's is higher,the excess goodwill of the acquirer will be smaller,and the ratio and probability of goodwill impairment will be lower.Further research found that when the acquisition time is longer,the social trust level of the region where the acquirer is located is lower,and the economic policy of the host country or region is more uncertain,the overseas expertise level of the M&A auditor has a more significant inhibitory effect on the excess goodwill;When the shareholding ratio of the institutional investors of the acquirer is low,the overseas expertise of the M&A auditor has a more significant inhibitory effect on the impairment of goodwill.Finally,when the overseas expertise level of the M&A auditor is relatively higher,the short-term and long-term M&A performance of the acquirer is better.Further research found that when the M&A time is longer and the economic policy of the host country or region is more uncertain,the positive relationship between overseas expertise level of the M&A auditor and short-term and long-term M&A performance is more significant,but the institutional distance only has a significant moderating effect on the positive relationship between the overseas expertise of M&A auditors and shortterm M&A performance.The main contributions of this article are as follows: First,it has enriched the research on the influencing factors of corporate overseas M&A,and discovered the role of auditors,an important market intermediary institution,in the process of overseas M&A.The current research on the influencing factors of the effect of overseas M&A mainly focuses on factors such as corporate characteristics and external environmental characteristics.There are few studies on how market intermediaries,especially auditors,play a role in the process of overseas M&A.This article expands the research on the influencing factors of overseas M&A from the perspective of intermediaries.Second,this article enriches the research on the expertise of auditors in the context of auditors' going-out,and emphasizes the important role of overseas expertise of auditors in international business.Previous studies on the expertise of auditors mainly focused on the expertise of auditors in specific industries.Few documents focused on the specific experience that auditors have accumulated in handling international business.The research in this article expands this field and confirms auditors' positive influence of overseas expertise in overseas M&A from a theoretical level.Third,this article expands the research on the implementation effects of auditors' going-out strategy,and extends the positive effects of auditors' going out from the financial quality level to the impact on enterprises' going-out.Existing research on the effect of the implementation of the going-out strategy of auditors is mainly carried out from the perspectives of audit quality and audit fees.Few documents analyze how the going-out of auditors will affect the operating efficiency of the company's going-out,based on the research on the influence of merger auditors' overseas expertise on overseas M&A,this article provides empirical evidence for the positive influence of auditors on the company's overseas operations.Fourth,from a practical point of view,the research conclusions of this article can provide important enlightenment for the government and industry regulators to continue to deepen the auditors' going-out strategy,and provide a certain reference for enterprises to select accounting firms in the process of developing overseas business,and also provide practical guidance for auditors to develop overseas expertise and undertake overseas business,and provide theoretical clues for regulators to control the "thunderstorm" of overseas M&A goodwill. |
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