An Analysis On Impact Of Internal Control Effectiveness To Performance Of Mergers And Acquisitions Of Listed Company

With the rapid development of global economic integration and capital markets, domestic and international M & A activity has become an important way for enterprises to expand. On the basis of this, controlling the acquisition risks and improving M & A performance effectively become an important topic of acquirers. As an important aspect of internal and external supervision and management of company, Internal control can inhibit the occurrence of factors that causing bussiness risks to a certain extent. It has a great impact on the controlling of external business risks and internal management risks. In M & A activity accompanying by a series of risks, doing a study on the relationship between the effectiveness of internal control and M& A performance has obvious theoretical and practical significance.At present, less study is about the impact of the effectiveness of internal control and the five elements of internal control to the M & A performance.Internal control system was gradually improved and mature in2011. In response to this situation, this study will conduct the study of their effects on M & A performance from the aspects of effectiveness of internal control and effectiveness of the five elements of internal control creatively after the internal control has been improved and mature.The main contents of this study are as follows: First, it makes a detailed analysis of the status quo of internal control and the status quo of M & A. Among them, the analysis of the status quo of internal control includes internal control system and internal control information disclosure; The analysis of the status quo of listed companies’ M & A include the trend of M & A in different years and in different industries. Second, based on the analysis of status of internal control and M & A performance, it will make the theoretical analysis of the internalcontrol and the five elements of internal control’s influencing to M & A performance,and then give the hypothesis of this study. Third, it sets up the index system according to the relevant literature and the characteristics of this study and does the empirical analysis. This study establish an index system of internal control according to the internal control information disclosure and the contents of internal control, while defining the weights of specific targets using the method of entropy. This study choose the companies with the occurrence of M&A in 2012 as samples. This study conduct the empirical analysis from 2011 to 2014. The M & A performance of the year from 2012 to 2014 minus the M &A performance in the year of 2011 are explanatory variables. The index of performance include rate of return on common stockholders’ equity, total assets turnover, increase rate of main business revenue and earning per share for representative of profitability, asset operational capacity, development capacity and shareholder profitability. Controlling variables involves company size,board size, M & A size, ownership concentration and asset-liability ratio. It makes a conclusion of this article by descriptive analysis, correlation analysis and regression analysis. Fourth, this study gives the corresponding conclusions and recommendations based on the empirical results.The conclusion is that the effectiveness of internal control,the effectiveness of internal environment, the effectiveness of risk assessment,the effectiveness of control activities,the effectiveness of internal supervision has a positive effect on M & A performance,while the effectiveness of information communication has a positive effect on M & A performance except earnings per share.Internal environment,control activities,information communication has a significant affect.At last this study summarizes the problems and prospects of the study.