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Government audit supervision and enterprise mergers and acquisitions

Authors :
Shangkun Liang
Weizhi Xue
Nan Lin
Source :
China Journal of Accounting Studies, Vol 12, Iss 1, Pp 25-46 (2024)
Publication Year :
2024
Publisher :
Taylor & Francis Group, 2024.

Abstract

As an important part of the national political system, government audits play a significant role in supervising and restricting enterprises. Since 2010, the National Audit Office of China has repeatedly disclosed the problems regarding enterprises’ M&A to prevent the loss of state-owned assets. This study takes listed companies controlled by the central enterprises of A-shares from 2008 to 2018 as a sample to investigate the impact of government audit supervision on M&A. We find that government audit supervision reduces the number and scale of M&As. Further research shows that government audits can reduce enterprises’ M&A premiums and affect payment methods. Finally, government audits significantly improve the short- and long-term performance of M&As. These findings show that Chinese government audits positively affect corporate governance, curbing M&As that damage enterprise interests. This study provides micro-level evidence of the governance effect of government audits on the scientific decision-making of enterprises.

Details

Language :
English
ISSN :
21697213 and 21697221
Volume :
12
Issue :
1
Database :
Directory of Open Access Journals
Journal :
China Journal of Accounting Studies
Publication Type :
Academic Journal
Accession number :
edsdoj.fe6ef03de25e4b95a72e409cd3d31227
Document Type :
article
Full Text :
https://doi.org/10.1080/21697213.2023.2239676