Research On Audit Risk Of Goodwill Impairment Of M&A Enterprises

Since the relaxation of merger and acquisition policies by the state,the phenomenon of listed companies expanding outward through mergers and acquisitions has become increasingly common.On the one hand,companies can benefit from the synergistic effects brought by mergers and acquisitions,and on the other hand,the large-scale mergers and acquisitions of listed companies have led to an increasing volume of merged goodwill,and the risk of goodwill impairment continues to rise.Many companies blindly follow the trend and quickly join the ranks of mergers and acquisitions,accumulating huge amounts of goodwill,but keep it secret when there are signs of goodwill impairment.Goodwill is divided into self generated goodwill and merged goodwill,and the goodwill studied in this article refers to merged goodwill.In 2018,the overall Chinese economy declined.Many enterprises use the pretext of tight economic conditions and deteriorating industry environment to continuously provision for impairment of goodwill.The phenomenon of impairment of goodwill in the domestic market is frequent,and there are also cases of huge impairment of goodwill.The volume of merged goodwill in the domestic market has decreased to a certain extent.However,the confusion of many listed companies withdrawing goodwill impairment at will not only harms the interests of small and medium-sized investors,but also increases the Audit risk faced by auditors: first,because goodwill impairment is likely to lead to earnings management motivation of enterprise management,enterprises with goodwill impairment often have higher risk of material misstatement at the financial statement level;Secondly,the occurrence of signs of goodwill impairment will aggravate the risk of major misstatement at the level of goodwill recognition,because the process of goodwill impairment test is complex,which aggravates the difficulty and risk of auditors in implementing further audit procedure;Thirdly,in the process of implementing goodwill impairment audits,auditors lack sufficient caution when utilizing the work of external experts.This paper adopts the literature research method and the case study method,and on the basis of combing the previous research results in goodwill,Audit risk,Audit risk of goodwill impairment,and the influencing factors of goodwill impairment in mergers and acquisitions,selects the representative case-the goodwill impairment audit of Palm Fun Technology as the case study object.Based on the modern risk oriented audit theory,starting with the motivation and process of M&A of Zhangqu Technology,we gradually analyze the problems existing in the risk assessment stage and further audit procedure of auditors: first,excessive reliance on the assessment results of external assessment institutions;The second is to standardize the disclosure of information on key audit matters;Third,the implementation of audit procedure was not in place.Finally,based on the above case analysis,this article proposes relevant suggestions for addressing the common issues exposed by auditors during the audit process,in order to provide some reference for certified public accountants in practical work through this study,improve the audit quality of certified public accountants,reduce goodwill "landmines",and enhance investors’ confidence in the capital market.