Author : Sasson Bar-Yosef
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Book Synopsis Earnings Management and Corporate Governance in Family-Controlled Companies by : Sasson Bar-Yosef
Download or read book Earnings Management and Corporate Governance in Family-Controlled Companies written by Sasson Bar-Yosef and published by . This book was released on 2009 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Corporate governance literature advances the idea that certain aspects of board of directors' structure improve monitoring of managerial decisions. Among these is the managers' decision to manage earnings. Prior studies have shown that earnings management, in widely-held public companies, is less prevalent when there is a high level of board independence. However, there is less evidence on the effectiveness of board independence on earnings management in family-controlled companies. This issue is interesting in particular as such companies are susceptible to various types of agency concerns. It is the purpose of this study to shed light on the earnings management issue in family-controlled companies, characterized by a potentially low board independence environment. In this study, board independence is estimated by two parameters (i) proportion of independent directors on board, and (ii) lack of CEO/Board Chairman duality function, with special attention paid to the case where the CEO is a member of the controlling-family. Our empirical results provide evidence that, indeed, the impact of board independence on earnings management is weaker in family-controlled companies. The same effects are also found for the cases where the CEO is a member of the controlling-family, even though she is not also the Board Chairman.