Accounting Conservatism in Family Firms

Chapter
Part of the Contributions to Management Science book series (MANAGEMENT SC.)

Abstract

This chapter examines another relevant earnings quality in family firms, namely accounting conservatism. We argue that family businesses differ from non-family firms with regard to accounting conservatism due to their long-term investment horizon as well as the importance they place on non-economic factors. In this chapter we first discuss the notion of accounting conservatism, and more specifically of conditional conservatism. We then show that family firms, on average, exhibit higher accounting conservatism than non-family firms. We observe variability in the results due to the differences in the institutional environment, and in the management structure. We corroborate our findings by extending the notion of accounting conservatism. We thus affirm that family firms tend to be less tax-aggressive than non-family firms. Finally, we provide numerous research avenues regarding accounting conservatism in family firms.

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Copyright information

© Springer International Publishing AG 2018

Authors and Affiliations

  1. 1.Department of Economics and ManagementUniversity of PisaPisaItaly
  2. 2.Department of AccountingMonash UniversityCaulfield East, MelbourneAustralia

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