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Earnings Management and Corporate Governance in Family Firms: Evidence From a Small Market

Earnings Management and Corporate Governance in Family Firms: Evidence From a Small Market

Elisabete Vieira, Mara Madaleno
Copyright: © 2019 |Pages: 27
ISBN13: 9781522578178|ISBN10: 152257817X|ISBN13 Softcover: 9781522585947|EISBN13: 9781522578185
DOI: 10.4018/978-1-5225-7817-8.ch006
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MLA

Vieira, Elisabete, and Mara Madaleno. "Earnings Management and Corporate Governance in Family Firms: Evidence From a Small Market." International Financial Reporting Standards and New Directions in Earnings Management, edited by Jonas da Silva Oliveira, et al., IGI Global, 2019, pp. 127-153. https://doi.org/10.4018/978-1-5225-7817-8.ch006

APA

Vieira, E. & Madaleno, M. (2019). Earnings Management and Corporate Governance in Family Firms: Evidence From a Small Market. In J. Oliveira, G. Azevedo, & A. Ferreira (Eds.), International Financial Reporting Standards and New Directions in Earnings Management (pp. 127-153). IGI Global. https://doi.org/10.4018/978-1-5225-7817-8.ch006

Chicago

Vieira, Elisabete, and Mara Madaleno. "Earnings Management and Corporate Governance in Family Firms: Evidence From a Small Market." In International Financial Reporting Standards and New Directions in Earnings Management, edited by Jonas da Silva Oliveira, Graça Maria do Carmo Azevedo, and Augusta da Conceição Santos Ferreira, 127-153. Hershey, PA: IGI Global, 2019. https://doi.org/10.4018/978-1-5225-7817-8.ch006

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Abstract

Earnings management and corporate governance relationships are examined for a sample of 49 Portuguese listed firms considering an unbalanced panel for the period 2002-2017, using panel corrected standard errors models and considering the family ownership effect. Empirical findings reveal that there is a positive relationship between corporate board independence and earnings management and that the presence of women on board decreases earnings management practices. Results are consistent with the hypothesis that earnings management practices are lower in family firms than in non-family firms. Size, being audited by the Big 4 companies, return on assets, loss, and the existence of an audit committee on board influence positively earnings management, but leverage, age, and ownership control are negatively related to earnings management. Results indicate that further auditing and control is necessary for Portuguese listed companies leading to strict recommendations to be followed by policymakers regarding control of these firms.

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