We examine the impact of lifetime work experience of top executives on mergers and acquisitions (M&As) behavior and outcome. Based on hand-collected data of top executives in a sample of Chinese firms during 2002–2018, we construct a generalist ability index of top executives to study the impact of generalist top executives (GTEs) vs. specialist top executives (STEs) on M&As. Our findings suggest that GTEs conduct more M&As than those of STEs. The results are robust to alternate specifications of M&A frequencies and after accounting for endogeneity issue. Furthermore, the M&A announcement and long-term returns are better for acquirers with GTEs than those with STEs. We attribute the findings to GTEs' ability of searching target ex ante, making the M&A process efficient, and fully leveraging their social networks post M&A. In addition, we find the increase in M&A activities in GTE firms are primarily due to GTEs' experience of M&As rather than their talents. Finally, the M&As from GTEs improve investment efficiency and are less likely to divest targets post M&As. In sum, GTEs conduct more M&As and they create value in the process.

We hypothesize and find that financial reporting quality at the foreign subsidiaries of US multinational companies (MNCs) is higher when the MNC's principal auditor engages a component auditor to audit the foreign subsidiary on its behalf. An important innovation of this study is that we focus on comparing the financial reporting quality of equivalent subsidiaries with and without component auditor work. Our approach contrasts with extant studies that examine the consequences of variation in the total amount of component auditor work at the MNC level. Our results are important for two reasons. First, we provide an alternative view on the consequences of component auditor use compared to the emerging literature in this area, which typically finds a negative association between the extent of component auditor use and financial reporting quality at the MNC level. Thus, we show that a different research design, conducted at the level at which component auditors actually perform their work, yields different inferences. Second, we demonstrate that using component auditors on US MNC group audits is an avenue through which US auditing institutions can affect financial reporting quality in foreign locations. We also reconcile our subsidiary‐level results to the MNC level by introducing a new MNC‐level component auditor “coverage” variable. Overall, we highlight that the best way to audit a foreign subsidiary is likely to be with a component auditor in the local country, which informs the debate surrounding recently proposed PCAOB guidance.