Publication
Title
Earnings management in business groups : tax incentives or expropriation concealment?
Author
Abstract
This study provides evidence that Belgian firms affiliated to a business group (holding) manage their earnings more than stand-alone firms. Earnings management is especially more prevalent in fully owned group firms compared to group firms with minority shareholders. This evidence is consistent with the hypothesis that controlling shareholders face fewer constraints to manage earnings if opportunistic earnings management cannot adversely affect the value of minority shareholders and is inconsistent with the claim that group firms would engage in earnings management to hide controlling shareholders' self-serving transactions.On the incentive part, we find that group firms strategically manage earnings in response to tax incentives. More specifically, we show that signed discretionary accruals of group firms depend significantly more on the marginal tax rate status of the firm as compared to independent firms. Finally, we document that earnings management is particularly facilitated through intra-group transactions. © 2014 University of Illinois. All rights reserved.
Language
English
Source (journal)
International journal of accounting. - Urbana, Ill.
Publication
Urbana, Ill. : 2014
ISSN
0020-7063
Volume/pages
49:1(2014), p. 27-52
Full text (Publishers DOI)
Full text (publishers version - intranet only)
UAntwerpen
Faculty/Department
Research group
Publication type
Subject
Affiliation
Publications with a UAntwerp address
External links
VABB-SHW
Record
Identification
Creation 14.03.2014
Last edited 22.11.2016
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