Business, Management and Accounting
4 years ago

Controlling shareholders reduce earnings manipulation in European family firms.

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MPRA Paper
Earnings Management and Contest to the Control: An Analysis of European Family Firms
Mauricio Jara‐Bertín, Félix J. López‐Iturriaga

Paper Summary

The article looks at how big shareholders affect how family businesses manage their earnings in Europe. They studied firms from 11 countries and found that when there's competition for control among big shareholders, family firms do less earnings management. Also, when a family is the biggest shareholder, having more family members as shareholders leads to more discretionary accruals.

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