Research On The Governance Mechanism Of The Difference Between M&A Financial Information Disclosure And Internal Audit

In recent years,General Secretary Xi Jinping put forward for several times to “build strong,outstanding and large-scale state-owned enterprises”.Under such background,a tide of mergers and acquisitions has been started in state-owned enterprises.How to supervise and manage during the processes of mergers and acquisitions? How to achieve better performances in merger and acquisition strategy of enterprises? And how to evaluate whether the strategy of merger and acquisition is successful or not after it? Internal audit should give play to its deserved functions.National Audit Office published the revised Regulations on Internal Audit Works of Auditing Administrations in Jan.2018,in which the responsibilities and authorities of internal audit agencies were reclassifies and higher requirements were put forward to the work achievements of internal audit,while when it came to the merger and acquisition of enterprises,how internal audit could give play to its significant role was worth concerning by the theoretical and practical cycles of audit.In view of this,with “disclosure of merger and acquisition information and governance mechanism of internal audit variations” were taken as the research objectives of this thesis to provide references for the disposal of this problem.Around the above research objectives,researches of this thesis were launched with the merger and acquisition of China Poly Group on BP Co.,Ltd.as the background.First of all,analytical procedures of the financial information disclosed before and during the merger and acquisition of BP Co.,Ltd.was executed from the visual angle of internal audit,through which problems including low corporation benefits,obvious decrease of gross profit rate,unreasonable disposal of parts of accounting policies and obvious transactions in money flows of enterprise,etc.were found in BP Co.,Ltd.,and there was the suspicion of inflated profits,fictional money flow and blind expansion,etc.;secondly,through comparison of audit results,conditions like undisclosed significant investments and true profits of enterprise,potential enterprise risks and legal risks,etc.were found in the financial information of merger and acquisition of the enterprise;what's more,through further analysis,it was found that the variation between financial information of merger and acquisition and internal audit results had caused bad influences on the merger and acquisition,that is,the price for merger and acquisition was increased,the future financial profits of the acquirer was reduced and the operational and legal risks of the acquirer were increased;finally,the following conclusions were obtained in this thesis:(1)BP Co.,Ltd.should take measures to further regulate the financial information disclosure;(2)internal audit mechanisms could be introduced to merger and acquisition of state-owned enterprises to avoid the false financial information disclosure of the acquirer and reduce the risks in the merger and acquisition.In addition,punishment mechanisms could also be adopted to improve the working quality of financial consultants,and state audit departments could be submitted to solve the significant problems occurred during the merger and acquisition.Main innovative points of this thesis contained the following 2 aspects:(1)innovations existed in the analysis visual angle,and the financial information disclosure in merger and acquisition of enterprises should be analyzed from the aspect of internal audit;(2)there was certain innovation in the research objective and contents,based on the visual angle of internal audit,the acquirer BP Co.,Ltd.was selected as the research objective to research the disclosed financial information during the process of merger and acquisition of it,which enriched the research objectives and contents of internal audit theories.The insufficiencies of this thesis lay in the facts that not all the contents of the financial statement analytical theories were expressed in details,and there were certain limitations in the application of financial analytical theories,meanwhile there might also be omissions in the suggestions summarized for the state-owned enterprises to avoid variations in financial information of merger and acquisition.