Document Type
Conference Item
Publication Date
1-1-2010
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.
Divisions
Faculty_of_Business_and_Accountancy
Event Title
Joint Symposium Journal of Contemporary Accounting and Economics (JCAE) and Seoul National University (SNU)
Event Location
Seoul, Korea
Event Dates
04-05 January 2010
Event Type
conference