| Overseas M&A is a special trading activity. Since reform and opening up,domestic enterprises have growing overall strength, and international tradeexchanges have become even more frequent. As a result, the powerful enterpriseshave adopted overseas M&A strategy to expand their global market. Overseas M&A,however, is a complex and risky economic activity. With frequent failures inoverseas M&A of domestic enterprises, including SAIC acquiring SSANG YONG,and CNPC acquiring Unocal, both theorists and practitioners recognize theimportance of internal control in overseas M&A. Almost all of China’s largeenterprises have established an internal control system, but many of them have notput the internal control system in practice. According to an internal control testing ofinternal audit, gradually improving the internal control system of enterprises is aneffective way to strengthen internal controls.This paper carries out research by combining normative research with caseresearch and applying the questionnaire survey method, and covers five parts. Thefirst part is a brief introduction of the research background, purpose, significance,ideas, methods, and main content and domestic and foreign literature review. Thesecond part describes the overseas M&A theory foundation, and internal controltheory foundation. The third part describes HW Group’s internal control system,including the Group’s profile and internal control framework, summarizes HWGroup’s overseas M&A procedures for a company and internal control framework ofHW Group’s overseas M&A activities, and further analyzes critical control pointsfaced by HW Group in overseas M&A business. The fourth part systematicallydescribes the testing procedures conducted to internal control of HW Group; testseffectiveness of design and implementation of HW Group’s overseas M&A internalcontrol system; and then comprehensively evaluates HW Group’s overseas M&Aactivities. The fifth part analyzes the problems existing in the HW Group’s overseasM&A activities, puts forward suggestions and obtains enlightenments.Combined with case study on internal control evaluation of HW Groupperforming overseas M&A, this paper contributes in summarizing and testing theentire internal control process of the overseas M&A business, and obtains designeffectiveness and effective results of the HW Group’s internal control system throughcomprehensive evaluation. Case study helps discovery the problems in overseas M&A activities among Chinese enterprises, propose targeted recommendations forimprovement, and provide experience for enterprises desiring to "go out". In this way,these enterprises then can improve M&A implementation capacity, and are expectedto complete the "internationalization" layout and participate in global competition ina better way. |
