An Analysis Of The Financial Internal Control Issues In The Merger And Acquisition Between Company ZY And RY

With the development of the socialist market economy system with Chinese characteristics these year,mergers and acquisitions among enterprises have become an important way for companies to integrate resources and expand their operation scale.At the same time,market competition intensifies constantly.To deal with these problems,mergers and acquisitions became an effective way to reduce the operating cost,expand the operating ability and rise the market competitive advantage,then achieve the improvement and development of financial internal control through the financial integration.Although the number of enterprise mergers and acquisitions cases increases year by year,according to the statistics of authoritative institutions,the success rate of enterprise M&As is less than 30% of the total amount.One of the most important reasons is the failure of integration after M&As,the core of which is the unsuccessful financial internal control.This paper is based on theoretical achievements about financial internal control of domestic and foreign known researchers,applys the five elements theory of COSO and studies the M&A case between company RY and ZY,to analyse the problems existing in financial activities,business activities,information communications and supervisions after M&As.In the case of company RY and ZY,although the system of internal control and risk management has been established,the neglected financial internal control work,the overconcentrated power and the lack of supervision led to a serious shortage of financial internal control.Lack of plans to solve money security problems and communications between managers could also be the problems.In China,most enterprises pay more attention on transactions,but ignore management in daily operations.This paper analyzes the problems of company RY from the perspective of investors.By using the theory of internal control,used the method of documentary and case analysis and applying COSO Internal Control-Intergrated Framework,the author objectively puts forward solutions to optimize the company’s financial internal control.It is of practical significance to improve the theory and practice of financial internal control in China.