On The Integration And The Performance Appraisal Indexes Of Merger&Acquisition Enterprises’ Internal Control

Merger and Acquisition is a method for companies to enhance its development,which is happened more and more nowadays. However, many cases of Merger andAcquisition end up with failure and one important reason for this phenomenon islacking of scientific and reasonable integration. Because of the importance of theinternal control system, the integration of the internal control system is the firstprogram all of the integration programs. Good integration of the internal controlsystem after the Merger and Acquisition can create value and enhance the success ofMerger and Acquisition so that the integration of the internal control system becomesthe research hotspots about Merger and Acquisition.This paper integrate the he internal control system and evaluate the process forcompanies which have Merger and Acquisition process from integration aspects ofstrategy management, control activities, administration structure, human resource andcompany culture.To begin with, this paper divides the process of Merger and Acquisition into twosteps which is evaluating and planning before the process start and putting theintegration into practice after the process. In the first step, the company with Mergerand Acquisition need to do responsible investigation and evaluation on both thecounterparts of the Merger and Acquisition from the aspects of strategy,administration structure, control activities, human resource and company culture,make out assessment reports and prepare for the later integration work. In the otherstep, companies have to set up work groups for all the four aspects and put theintegration under the assessment reports for the four aspects strictly.Secondly, this paper build up the evaluation system for the integration of theinternal control system after Merger and Acquisition process and divides theevaluation for the internal control system after Merger and Acquisition process intotwo aspects of qualitative assessment and quantitative assessment. The qualitativeassessment is mainly for assessing the process of the integration of the internal controlsystem, which use analytic hierarchy process and expert scoring method to judgewhether the process is reasonable. And the quantitative assessment use principal component analysis to calculate synergies from internal control integration.Based onqualitative assessment and quantitative assessment, this paper use simple evaluationmethod to calculate overall effectiveness of internal control integration.In the end, this paper take the company Weichaidongli as the practical case toanalyze the process and the result of the integration of the internal control system afterits Merger and Acquisition.