IDEAS home Printed from https://ideas.repec.org/a/taf/oabmxx/v7y2020i1p1806669.html
   My bibliography  Save this article

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

Author

Listed:
  • Adeeb Abdulwahab Alhebri
  • Shaker Dahan Al-Duais

Abstract

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.

Suggested Citation

  • Adeeb Abdulwahab Alhebri & Shaker Dahan Al-Duais, 2020. "Family businesses restrict accrual and real earnings management: Case study in Saudi Arabia," Cogent Business & Management, Taylor & Francis Journals, vol. 7(1), pages 1806669-180, January.
    • Handle: RePEc:taf:oabmxx:v:7:y:2020:i:1:p:1806669
    DOI: 10.1080/23311975.2020.1806669
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/23311975.2020.1806669
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/23311975.2020.1806669?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sunday Olugboyega Kajola & Wasiu Abiodun Sanyaolu & Abiola Akanbi Tonade & Adekunle Adeyemi, 2020. "Corporate Board Attributes And Earnings Management In Nigerian Banking Sector," Management Strategies Journal, Constantin Brancoveanu University, vol. 47(1), pages 22-35.
    2. Sri Murni & Rahmawati Rahmawati & Ari Kuncara Widagdo & Eko Arief Sudaryono & Doddy Setiawan, 2023. "Effect of Family Control on Earnings Management: The Role of Leverage," Risks, MDPI, vol. 11(2), pages 1-15, January.
    3. Amin, Qazi Awais & Cumming, Douglas, 2021. "Blockholders and real earnings management-the emerging markets context," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 75(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:oabmxx:v:7:y:2020:i:1:p:1806669. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://cogentoa.tandfonline.com/OABM20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.