| In recent years,with the continuous development of China’s capital market and the active promotion of relevant national policies,China’s M&A transactions are prevalent in the world,and more and more companies hope to optimize the allocation of resources in the capital market through M&A,and promote their own innovation through marketization.However,many companies have gone through hardships and succeeded in M&A,the resulting high goodwill impairment has been buried in countless mines,hindering the development of enterprises,and the number of M&A cases involving substandard performance and provision for huge goodwill impairment has gradually increased.The loss of goodwill impairment affects the operating performance of the merged company,and also damages the interests of investors,causing the volatility of the company’s stock price,even harmed the order of China’s capital market.In this case,M&A transactions are undoubtedly carried out at the expense of the original.How to curb the risk of goodwill impairment generated by enterprises,and how to deal with the generated goodwill impairment in a standardized manner and disclose information,these issues have triggered the discussion of the capital market in many ways.The essence of internal control is to control and regulate the internal management and operation of the enterprise,so as to improve the management effect and operating efficiency of the company and promote the realization of the enterprise’s strategic objectives.As an important means of self-governance for companies in the current era,internal control restricts the stable operation of enterprises under the legal and compliant articles of association,and also effectively restricts the behavior of the management,so as to control various business risks of the enterprise.With regard to the issue of goodwill impairment,existing studies have shown that effective internal control has a positive effect on goodwill impairment.However,most of the relevant studies are based on empirical research,with few specific case studies,and the role of internal control is rarely analyzed from the whole process of goodwill impairment.From the perspective of internal control,this paper studies the problems of goodwill impairment of Great Wall Movie and Television Company based on the framework of the five elements of internal control.Firstly,the relevant literature is studied to understand the research process of goodwill impairment and internal control at home and abroad,define the relevant concepts studied in this paper,and clarify a series of theoretical foundations used in the study,which lays the foundation for the following case analysis.Secondly,combined with the specific case of Great Wall Movie and Television Company,from the perspective of the five elements of internal control,it analyzes that there are many problems in the case company from the early recognition of goodwill to the formation of in-process impairment to the provision and information disclosure of goodwill impairment after the event,mainly manifested in the overly aggressive M&A strategy,the unreasonable equity structure of the enterprise,the unreasonable payment method,the overestimation of the value of the acquired party,the provision for goodwill impairment being utilized,the insufficient disclosure of goodwill information,the lack of information communication and the failure of internal supervision.Finally,based on the above case analysis,targeted suggestions are made in order to strengthen the company’s internal control construction,prevent the occurrence of goodwill bubbles in M&A activities,standardize the follow-up treatment and information disclosure of goodwill impairment,curb a series of financial risks caused by goodwill impairment,and provide reference for the prevention and control of goodwill impairment risks in the capital market. |
