Research On The Effect Of Controlling Shareholder’s Share Pledge On Goodwill Impairment

With the reform of China’s financial system and the rapid development of economy,since the securities companies launched the equity pledge business in 2013,with the advantages of low financing cost and fast speed,it has gradually become the preferred financing mode for the controlling shareholders of listed companies,and at the same time,it has also become a hot topic of academic research.This paper finds that when the stock price of an enterprise falls to the "warning line" and "closing line" of the pledge contract,the financial institutions will forcibly sell the shares pledged by the shareholders,resulting in the loss of control of the pledged shareholders.In order to avoid this risk,the controlling shareholders will stabilize the stock price in the way of earnings management,but this behavior will reduce the quality of financial information and disrupt the allocation of resources in the capital market.As an accounting subject,goodwill’s initial recognition and subsequent measurement rely heavily on the subjective judgment of financial personnel,which may leave "space" for earnings management.Therefore,will the pledge of controlling shareholders’ equity affect the accrual of goodwill impairment?How to restrain earnings management of controlling shareholders?These are all problems to be solved.In view of this,based on the theory of efficient market hypothesis,principal-agent theory,information asymmetry theory,internal control effectiveness theory,this paper analyzes the relationship among internal control,controlling shareholders’ equity pledge and goodwill impairment.Select 2014-2018 A-share listed companies as the research sample,use multiple regression analysis to explore the impact of the proportion of controlling shareholders’ equity pledge on goodwill impairment,and further explore the regulatory role of internal control on equity pledge and goodwill impairment.The results show that:(1)there is a significant negative correlation between the proportion of equity pledge of controlling shareholders and the accrual of goodwill impairment loss.(2)High quality internal control can reverse regulate the negative correlation between the proportion of equity pledge of controlling shareholders and the degree of goodwill impairment.(3)Compared with the asset management structure company,in the asset management structure company,the negative correlation between the proportion of controlling shareholders’ equity pledge and the performance of goodwill impairment is more significant.(4)When the controlling shareholders choose to use the pledged funds for themselves or the third party,the negative correlation between the equity pledge proportion and the accrual degree of goodwill impairment loss is obvious.However,the negative correlation between the two is not significant when the pledged financing is invested in the pledged company.Finally,based on the above empirical conclusions,this paper puts forward countermeasures and suggestions such as clarifying the disclosure requirements of equity pledge,improving the goodwill impairment test method,strengthening the internal control and supervision of Listed Companies in China,and focusing on industries and enterprises.