Family identification and earnings management in listed firms

Cédric Poretti, Tiphaine Jérôme and Carl Brousseau

Accounting in Europe, 2023, vol. 20, issue 3, 339-369

Abstract: In this paper, we investigate the earnings management behavior of listed family firms holding the name of the family (eponymous FF). Specifically, we use a Swiss sample of 1,544 firm-year observations from 2006 to 2018 to examine the association of eponymous FF with accrual-based earnings management in general, and identify circumstances where this association does not hold. First, we find that, on average, eponymous FF exhibit less earnings management than non-FF. Second, we exploit a Swiss-specific option to voluntarily turn away from IFRS to local GAAP. Using a difference-in-differences approach, we find that eponymous FF exhibit higher levels of earnings management immediately after the switch. Finally, we show that eponymous FF exhibit higher earnings management when the family is directly involved in the board of directors or the managing board. Our findings provide a more nuanced understanding of the effects of family identification on earnings management incentives in listed firms.

Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/17449480.2023.2231964 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:acceur:v:20:y:2023:i:3:p:339-369

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAIE20

DOI: 10.1080/17449480.2023.2231964

Access Statistics for this article

Accounting in Europe is currently edited by Lisa Evans

More articles in Accounting in Europe from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().