Research On The Effect Of Executive Turnover On Goodwill Impairment

Executive turnover is a big change for the company,and the succession manager will soon face pressure to improve performance.In the year when the executive changed,the succession manager had an incentive to reduce profit in order to have more room to improve profit in the future and shirk the responsibility of the company's poor performance to the previous management.In recent years,with the frequent occurrence of corporate mergers and acquisitions,the total amount of goodwill has also increased.Goodwill as an asset that needs to be tested for every year,due to its strong subjectivity,it is very likely that the profit will be adjusted through the impairment of goodwill.In view of this,this article deeply studies the relationship between executive turnover and the goodwill impairment,and it's helpful for understanding the deciding factors of goodwill impairment.This article takes 2010-2018 A-share listed companies as the research object,and empirically examines the effect of the executive turnover on goodwill impairment,and further explores the effect of different sources of the successor on goodwill impairment.Secondly,from the aspects of audit quality and property rights nature,research the effect of executive turnover on goodwill impairment in the case of whether they are audited by the "Big Four" and whether the company is a state-owned enterprise.The results of the study show that:(1)Compared with companies that didn't change in executives,companies that experienced a change in executives had a greater degree of goodwill impairment that year,and a lesser degree of goodwill impairment a year after the change of executives.(2)Different sources of succession have different effects on the goodwill impairment.In the year when the executive changed,the external successor suffered a greater degree of goodwill impairment than the internal successor.One year after the change of executives,the external successor suffered a lesser degree of goodwill impairment than the internal successor.(3)In terms of audit quality,the correlation between the executive turnover and the goodwill impairment is only reflected in the companies audited by the "non-big four".(4)In terms of the property rights nature,the correlation between the executive turnover and the goodwill impairment is only reflected in non-state-owned enterprises.