Family businesses restrict accrual and real earnings management: Case study in Saudi Arabia

This paper investigates accrual earnings management (AEM) and real earnings management (REM) in family businesses (FB) in Saudi Arabia. Current literature indicates that minority rights are confiscated by the controlling shareholders in a business environment weak to protect investors. Based on this...

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Autores principales:	Adeeb Abdulwahab Alhebri, Shaker Dahan Al-Duais
Formato:	article
Lenguaje:	EN
Publicado:	Taylor & Francis Group 2020
Materias:	family businesses real earnings management accrual earnings management Business HF5001-6182 Management. Industrial management HD28-70
Acceso en línea:	https://doaj.org/article/ef4dda72ec494d64b6eff95128704371
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id	oai:doaj.org-article:ef4dda72ec494d64b6eff95128704371
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spelling	oai:doaj.org-article:ef4dda72ec494d64b6eff951287043712021-12-02T14:41:54ZFamily businesses restrict accrual and real earnings management: Case study in Saudi Arabia2331-197510.1080/23311975.2020.1806669https://doaj.org/article/ef4dda72ec494d64b6eff951287043712020-01-01T00:00:00Zhttp://dx.doi.org/10.1080/23311975.2020.1806669https://doaj.org/toc/2331-1975This paper investigates accrual earnings management (AEM) and real earnings management (REM) in family businesses (FB) in Saudi Arabia. Current literature indicates that minority rights are confiscated by the controlling shareholders in a business environment weak to protect investors. Based on this argument, considering the various implications of AEM and REM on family businesses, the results show evidence that family businesses in Saudi Arabia engaged in both types of earnings management during the period 2014–2018, with a positive and signiﬁcant effect on both AEM and REM. This evidence supports the entrenchment hypothesis that FB have lower earnings quality due to manipulation in accruals and real activities. The results therefore indicate that earnings announced in Saudi family businesses’ financial statements are less reliable. These findings, that family-controlled firms are able to manipulate earnings, should be considered by regulators and policy makers.Adeeb Abdulwahab AlhebriShaker Dahan Al-DuaisTaylor & Francis Grouparticlefamily businessesreal earnings managementaccrual earnings managementBusinessHF5001-6182Management. Industrial managementHD28-70ENCogent Business & Management, Vol 7, Iss 1 (2020)
institution	DOAJ
collection	DOAJ
language	EN
topic	family businesses real earnings management accrual earnings management Business HF5001-6182 Management. Industrial management HD28-70
spellingShingle	family businesses real earnings management accrual earnings management Business HF5001-6182 Management. Industrial management HD28-70 Adeeb Abdulwahab Alhebri Shaker Dahan Al-Duais Family businesses restrict accrual and real earnings management: Case study in Saudi Arabia
description	This paper investigates accrual earnings management (AEM) and real earnings management (REM) in family businesses (FB) in Saudi Arabia. Current literature indicates that minority rights are confiscated by the controlling shareholders in a business environment weak to protect investors. Based on this argument, considering the various implications of AEM and REM on family businesses, the results show evidence that family businesses in Saudi Arabia engaged in both types of earnings management during the period 2014–2018, with a positive and signiﬁcant effect on both AEM and REM. This evidence supports the entrenchment hypothesis that FB have lower earnings quality due to manipulation in accruals and real activities. The results therefore indicate that earnings announced in Saudi family businesses’ financial statements are less reliable. These findings, that family-controlled firms are able to manipulate earnings, should be considered by regulators and policy makers.
format	article
author	Adeeb Abdulwahab Alhebri Shaker Dahan Al-Duais
author_facet	Adeeb Abdulwahab Alhebri Shaker Dahan Al-Duais
author_sort	Adeeb Abdulwahab Alhebri
title	Family businesses restrict accrual and real earnings management: Case study in Saudi Arabia
title_short	Family businesses restrict accrual and real earnings management: Case study in Saudi Arabia
title_full	Family businesses restrict accrual and real earnings management: Case study in Saudi Arabia
title_fullStr	Family businesses restrict accrual and real earnings management: Case study in Saudi Arabia
title_full_unstemmed	Family businesses restrict accrual and real earnings management: Case study in Saudi Arabia
title_sort	family businesses restrict accrual and real earnings management: case study in saudi arabia
publisher	Taylor & Francis Group
publishDate	2020
url	https://doaj.org/article/ef4dda72ec494d64b6eff95128704371
work_keys_str_mv	AT adeebabdulwahabalhebri familybusinessesrestrictaccrualandrealearningsmanagementcasestudyinsaudiarabia AT shakerdahanalduais familybusinessesrestrictaccrualandrealearningsmanagementcasestudyinsaudiarabia
_version_	1718389906268487680

Family businesses restrict accrual and real earnings management: Case study in Saudi Arabia

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