Related party transactions, family ownership and earnings quality: a study of Malaysian firms

Munir, S. (2010) Related party transactions, family ownership and earnings quality: a study of Malaysian firms. In: Joint Symposium Journal of Contemporary Accounting and Economics (JCAE) and Seoul National University (SNU), 04-05 January 2010, Seoul, Korea. (Submitted)

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Abstract

This study examines the effect of related party transactions on earnings quality of Malaysian firms with substantial family ownership. Certain related party transactions could be used to expropriate minority shareholders where they could transfer profits and cash from a firm to its owner. Using discretionary accruals quality (DAQ) and performance adjusted discretionary accruals (PACDA) as measures for earnings management, this study finds that earnings quality of firms with huge family ownership becomes much lower when they undertake related party transactions. This finding suggests that related party transactions could help the controlling families to expropriate the minority shareholders of the firms, hence exacerbating the agency problem and lowering earnings quality.

Item Type: Conference or Workshop Item (Paper)
Subjects: H Social Sciences > HD Industries. Land use. Labor
Divisions: Faculty of Business and Accountancy
Depositing User: Mr. Mohd Samsul Ismail
Date Deposited: 17 Dec 2014 02:39
Last Modified: 17 Dec 2014 02:39
URI: http://eprints.um.edu.my/id/eprint/11117

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