Purpose: – This paper aims to synthesize the extant research on earnings management in family firms.Design/methodology/approach: – The paper reviews the current state of knowledge about earnings management in family firms, identifying the main theoretical frameworks used in the empirical research on the topic, as well as the main types of said research and its findings.Findings: – Agency theory is identified as the main theoretical framework used. Two major types of research identified in the literature are discussed, namely, earnings management in family firms versus non-family firms and earnings management in different types of family firms.Originality/value: – Important research gaps are identified, and future research priorities are suggested. These pertain to the lack of research on earnings management in different types of family firms, the utility of using qualitative and experimental research, as well as the importance of using theoretical frameworks better able to capture the peculiarities of family firms.

This study investigates the relationship between the level of earnings management in family and non-family firms and analyses whether or not this relationship depends on the level of the monitoring effect from analysts. The empirical study relies on a sample of 1,043 UK-listed firms. We find that family firms have higher levels of earnings management as compared to non-family firms, unless they are followed by a significant number of analysts. This study fills a gap in the literature by suggesting that not all family firms should be considered the same when addressing incentives for earnings management. It also highlights the moderator effect of the analyst coverage in the relationship between the family status and earnings management.

Purpose: The purpose of this paper is to discuss the most relevant issues related to the impact of financial restatements in the dynamics of financial markets and identify several research gaps to be investigated in future research. Design/methodology/approach: The methodology is based on a systematic review of the literature described by Tranfield et al. (2003). The final sample includes 47 academic papers published from 1996 to 2019. Findings: Papers in this domain discuss three main topics: how the market prices the announcement of a financial restatement; how financial restatements affect the announcing firm’s cost of capital and how financial restatements affect firms’ reputation. There are several issues to explore in future research, including whether financial restatements affect the dynamics of financial markets in Europe, whether the market fully and promptly assimilates the information content of a restatement, the role of financial analysts’ information disclosures in this process or how regulators may improve the way they provide investors with timely information about firms’ restating problems. Research limitations/implications: There is always some degree of subjectivity in the definition of the keywords, search strings and selection criteria in a systematic review. These are all important aspects, as they delimitate the scope of the study and define the sample of papers to be reviewed. Practical implications: The answers to the research questions identified in this paper may provide regulators with information to improve financial accounting and reporting standards and strengthen investors’ confidence in accounting information and the dynamics of financial markets. Originality/value: This paper systematically reviews the relevant literature exploring the connection between financial restatements and the dynamics of financial markets. It contributes to the academic community by identifying several research questions that may impact the theory and practice related to accounting quality and capital markets.

El objetivo del estudio consiste en analizar la calidad de la información financiera de las empresas españolas, comparando las empresas familiares y las no familiares, y relacionando dicha calidad con las prácticas de gobierno corporativo. Para alcanzar este objetivo se analizó una muestra de 650 empresas españolas durante el período 2011-2016. Con base en la teoría de la agencia y en la literatura sobre la riqueza socioemocional, los resultados muestran una mayor calidad de la información financiera en las empresas familiares, relación que se ve reforzada por los factores de gobierno corporativo. Nuestros resultados son consistentes con la investigación previa y con las premisas de la teoría de agencia, que indican menores asimetrías de información entre propietarios y gestores en el singular contexto de las empresas familiares. Además, nuestro trabajo proporciona evidencia empírica de que la participación de las mujeres en el consejo de administración contribuye a la mayor calidad de la información financiera en las empresas familiares, contribuyendo a explicar la heterogeneidad de las empresas familiares en términos de gestión del resultado contable. El estudio contribuye a cubrir la brecha que existe en la literatura sobre la influencia del contexto de empresa familiar y la influencia de la presencia de las mujeres en el consejo sobre la calidad de la información financiera. The objective of this study is to explore the quality of financial information of Spanish firms, by comparing family firms with non-family firms, and relating this quality with corporate governance practices. For this purpose, a sample of 650 Spanish firms was analysed during the period 2011-2016. Based on agency theory and socioemotional wealth literature, the results show a higher quality of financial information in family firms, a relationship which is reinforced by corporate governance factors. Our results are consistent with the scant previous research, and with the premises of agency theory, which indicate lower asymmetry of information between owners and managers in the singular context of family firms. Additionally, our work provides evidence that the participation of women on the board boosts the quality of financial information in family firms, contributing to the justification of family firm heterogeneity in terms of earnings management. This study contributes to reducing the gap in the literature on the influence of the family business context and the influence of women on the board on the quality of financial reporting.

This paper analyzes the determinants of the level of earnings management in a wide sample of listed firms from the hotel industry in 15 countries. The empirical study relies on the discretionary accruals, as an indication of earnings management, and examines the firm and country characteristics that are potentially associated with those discretionary accruals. The results suggest that firm characteristics, including the leverage ratio, cash flow from operations, investment opportunities and the frequency of losses, are the major determinant of earnings management in the hotel industry around the world. Our results also show that firms with five star hotels have different incentives to manipulate earnings, when compared to firms holding lower quality hotels. The hotels’ star rating also seems to play a different role in explaining the level of earnings management in common-law countries, when compared to code-law countries. This paper contributes to the accounting literature by examining the determinants of earnings management of a large panel of firms from the hotel industry and by focusing on the characteristics of the firm and its institutional environment.