The influence of family board involvement on earnings management

This study explores the influence of family ownership and board involvement on earnings management in German-listed firms. We extend existing research by applying a more precise measurement that offers new insights into family’s effect behaviour. Our models suggest degree families is significant driver management, factor disregarded so far literature. Furthermore, distinction between founding should be carefully considered. Employing sample 278 firms from 2000-2013, we find greater presence executive associated with earnings-decreasing accrual-based practices real activities via discretionary expenses. viewed as less value-destroying REM activity to meet earning targets. Overall, German seem use their powerful positions shareholders members expropriate manage targets while maintaining wealth