Research On The Influence Of Management Power On M&A Goodwill

Since the establishment of Chinese capital market,with the continuous advancement of capitalization process,fierce market competition makes enterprises seek more efficient ways to achieve rapid expansion of market share,improve management efficiency,play financial synergies and other purposes.To this end,in recent years,the number of Chinese enterprises participating in merger and acquisition activities continues to increase,the number of related events and transactions are both increasing significantly,and the goodwill assets generated by merger and acquisition activities are also showing an obvious growing trend.As the estimation of the value of M&A goodwill is largely affected by the subjective judgment of the acquirer,the phenomenon of recognizing excess goodwill sometimes exists.Recently,there are many reasons why Chinese listed companies recognize excess goodwill leading to huge goodwill impairment.The above problems will not only cover up the credit risk behind the high goodwill of the enterprise,but also greatly increase the uncertainty of the enterprise’s future business performance and affect its performance in the capital market,which will bring great harm to the capital market and its investors.Therefore,it is necessary to explore the reasons for the formation of huge goodwill,so as to provide reference basis for regulators and stakeholders.In order to explore the relationship among management power,M&A goodwill and audit quality,this paper first reviews the past literature.On this basis,the data of Shanghai and Shenzhen A-share listed companies from 2008 to 2021 is selected as the initial research sample,and the relationship among the three is empirically tested.Firstly,this paper empirically discusses the relationship between management power and M&A goodwill and the relationship between them under different criteria.Secondly,the moderating effect of audit quality on the relationship between management power and M&A goodwill is further studied.The results show that there is a significant positive correlation between management power and M&A goodwill.The greater the management power,the greater the M&A goodwill when other conditions remain unchanged.At the same time,compared with companies with lower asset-liability ratio,the positive impact of management power on M&A goodwill is more significant in companies with higher asset-liability ratio.Compared with state-owned enterprises,the positive impact of management power on M&A goodwill is more significant in private enterprises.Furthermore,audit quality has a significant moderating effect on the relationship between management power and M&A goodwill,and audit quality weakens the positive correlation between management power and M&A goodwill.Finally,combined with the actual situation of corporate governance and the empirical research conclusion,this paper puts forward the corresponding policy suggestions.Enterprises should optimize the allocation of management power,such as reasonable allocation of management power,improve the quality of financial information disclosure of listed companies,strengthen audit supervision,etc.