IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-00677531.html

Financial Reporting Quality in Private Equity Backed Companies: The Impact of Ownership Concentration

Author

Listed:
  • C. Beuselinck

    (LEM - Lille - Economie et Management - Université de Lille, Sciences et Technologies - CNRS - Centre National de la Recherche Scientifique)

  • S. Manigart

Abstract

We argue and empirically show on a sample of 270 unquoted, private equity backed companies that the shareholder structure of private companies influences the quality of their accounting information. We show that companies in which private equity (PE) investors have a higher equity stake produce accounting information that is of lower quality than companies in which PE investors have a lower equity stake, controlling for company size and age. We argue that this is evidence that a large equity stake is a substitute for high earnings quality
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • C. Beuselinck & S. Manigart, 2007. "Financial Reporting Quality in Private Equity Backed Companies: The Impact of Ownership Concentration," Post-Print hal-00677531, HAL.
    • Handle: RePEc:hal:journl:hal-00677531
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a
    for a similarly titled item that would be available.

    Other versions of this item:

    Citations

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


    Cited by:

    1. Douglas Cumming & Lars Helge Hass & Linda A. Myers & Monika Tarsalewska, 2023. "Does Venture Capital Backing Improve Disclosure Controls and Procedures? Evidence from Management’s Post-IPO Disclosures," Journal of Business Ethics, Springer, vol. 187(3), pages 539-563, October.
    2. Heidi Vander Bauwhede & Michiel De Meyere & Philippe Van Cauwenberge, 2015. "Financial reporting quality and the cost of debt of SMEs," Small Business Economics, Springer, vol. 45(1), pages 149-164, June.
    3. Lorraine Uhlaner & Mike Wright & Morten Huse, 2007. "Private Firms and Corporate Governance: An Integrated Economic and Management Perspective," Small Business Economics, Springer, vol. 29(3), pages 225-241, October.
    4. Jingyu Gao & Adi Masli & Ikseon Suh & Jingchang Xu, 2021. "The Influence of a Family Business Climate and CEO–CFO Relationship Quality on Misreporting Conduct," Journal of Business Ethics, Springer, vol. 171(1), pages 99-122, June.
    5. David B. Audretsch & Erik E. Lehmann, 2013. "Corporate governance in newly listed companies," Chapters, in: Mario Levis & Silvio Vismara (ed.), Handbook of Research on IPOs, chapter 9, pages 179-206, Edward Elgar Publishing.
    6. Julio Sarmiento & Mehdi Sadeghi & Juan S. Sandoval & Edgardo Cayon, 2021. "The application of proxy methods for estimating the cost of equity for unlisted companies: evidence from listed firms," Review of Quantitative Finance and Accounting, Springer, vol. 57(3), pages 1009-1031, October.
    7. M. Knockaert & T. Vanacker, 2011. "The Association between Venture Capitalists Selection and Value Adding Behavior: Evidence from Early Stage High Tech Venture Capitalists," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 11/741, Ghent University, Faculty of Economics and Business Administration.
    8. Sami Basly & Tayeb Saadi, 2020. "The Value relevance of accounting performance measures for quoted family firms: A study in the light of the alignment and entrenchment hypotheses," Post-Print hal-03258926, HAL.
    9. Joseph Mbawuni, 2019. "Assessing Financial Reporting Quality of Listed Companies in Developing Countries: Evidence from Ghana," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 11(9), pages 1-29, September.
    10. Fabio Bertoni & María Ferrer & José Martí, 2013. "The different roles played by venture capital and private equity investors on the investment activity of their portfolio firms," Small Business Economics, Springer, vol. 40(3), pages 607-633, April.
    11. Goossens, L. & Manigart, S. & Meuleman, M., 2007. "The change of ownership after a buyout: Impact on performance," Vlerick Leuven Gent Management School Working Paper Series 2007-26, Vlerick Leuven Gent Management School.
    12. Jelic, Ranko & Zhou, Dan & Ahmad, Wasim, 2021. "Do stressed PE firms misbehave?," Journal of Corporate Finance, Elsevier, vol. 66(C).
    13. Ahmed Yousif Adam Ismael, 2017. "The Impact of Creative Accounting Techniques on the Reliability of Financial Reporting with Particular Reference to Saudi Auditors and Academics," International Journal of Economics and Financial Issues, Econjournals, vol. 7(2), pages 283-291.
    14. Claudia GRIGORAS-ICHIM, 2017. "Corporate Governance And Its Implications For Financial Reporting," EcoForum, "Stefan cel Mare" University of Suceava, Romania, Faculty of Economics and Public Administration - Economy, Business Administration and Tourism Department., vol. 6(1), pages 1-59, January.
    15. Christof Beuselinck & Marc Deloof & Sophie Manigart, 2008. "Private Equity Investments and Disclosure Policy," European Accounting Review, Taylor & Francis Journals, vol. 17(4), pages 607-639.
    16. Oliver Lukason & María-del-Mar Camacho-Miñano, 2020. "Corporate Governance Characteristics of Private SMEs’ Annual Report Submission Violations," JRFM, MDPI, vol. 13(10), pages 1-19, September.
    17. Douglas Cumming & Sofia Johan, 2009. "Pre-seed government venture capital funds," Journal of International Entrepreneurship, Springer, vol. 7(1), pages 26-56, March.
    18. Mirjam Knockaert & Tom Vanacker, 2013. "The association between venture capitalists’ selection and value adding behavior: evidence from early stage high tech venture capitalists," Small Business Economics, Springer, vol. 40(3), pages 493-509, April.
    19. Sharon Katz, 2008. "Earnings Quality and Ownership Structure: The Role of Private Equity Sponsors," NBER Working Papers 14085, National Bureau of Economic Research, Inc.
    20. Thilini Cooray & A. D. Nuwan Gunarathne & Samanthi Senaratne, 2020. "Does Corporate Governance Affect the Quality of Integrated Reporting?," Sustainability, MDPI, vol. 12(10), pages 1-30, May.
    21. Professor Owolabi, S.A. & Afolayan, Oluwatobi, 2020. "Auditor’s Independence (AUDINDP) and the Quality of Financial Reporting (FRQ) in Listed Deposit Money Banks (DMB’s) in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 4(8), pages 303-309, August.

    More about this item

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

    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:hal:journl:hal-00677531. 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: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    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.