Founding family ownership and earnings quality

• 成果类型: Article
• 署名作者: Wang, DC
• 署名单位: University of Nebraska System; University of Nebraska Lincoln
• 刊物名称: JOURNAL OF ACCOUNTING RESEARCH
• ISSN/ISSBN: 0021-8456
• DOI: 10.1111/j.1475-679X.2006.00213.x
• 发表日期: 2006
• 页码: 619-656
• 关键词: corporate-ownership; nonaudit services; market valuation; Audit committee; management; Informativeness; incentives; accruals; choices; COSTS

摘要

This study investigates the relation between founding family ownership and earnings quality using data from the Standard & Poor's 500 companies. Existing literature has documented that financial reporting is of higher quality when firms have stronger corporate governance mechanisms and when there is greater demand for quality financial reporting. I provide two competing theories of the effect of founding family ownership on the demand and supply of earnings quality: the entrenchment effect and the alignment effect. The empirical results show that, on average, founding family ownership is associated with higher earnings quality. In particular, I find consistent evidence that founding family ownership is associated with lower abnormal accruals, greater earnings informativeness, and less persistence of transitory loss components in earnings. In addition, the results suggest a nonlinear relation between family ownership and earnings quality.