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The role of board independence in mitigating agency problem II in Australian family firms

Setia-Atmaja, Lukas, Haman, Janto and Tanewski, George 2011, The role of board independence in mitigating agency problem II in Australian family firms, British accounting review, vol. 43, no. 3, pp. 230-246.

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Title The role of board independence in mitigating agency problem II in Australian family firms
Author(s) Setia-Atmaja, Lukas
Haman, Janto
Tanewski, George
Journal name British accounting review
Volume number 43
Issue number 3
Start page 230
End page 246
Total pages 17
Publisher Academic Press
Place of publication London, England
Publication date 2011-09
ISSN 0890-8389
1095-8347
Keyword(s) earnings management
family ownership
agency theory
board independence
Summary We investigate the impact of board independence on earnings management on a sample of family controlled firms listed on the Australian Securities Exchange (ASX). Using panel data over the period 2000–2004, we find evidence of earnings management among family controlled firms in Australia, an environment of high investor protection and private benefits of control. Findings show that a higher proportion of independent directors on boards is effective in reducing earnings management, thereby mitigating agency problems associated with entrenchment and expropriation in family firms. We also find that managers of family firms are less aggressive in managing earnings via discretionary long-term accruals compared to non-family firms.
Language eng
Field of Research 159999 Commerce, Management, Tourism and Services not elsewhere classified
Socio Economic Objective 970115 Expanding Knowledge in Commerce, Management, Tourism and Services
HERDC Research category C1.1 Refereed article in a scholarly journal
Copyright notice ©2011, Elsevier
Persistent URL http://hdl.handle.net/10536/DRO/DU:30046275

Document type: Journal Article
Collection: School of Accounting, Economics and Finance
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Created: Thu, 26 Jul 2012, 16:00:47 EST by Leanne Swaneveld