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What Form of Visibility Affects Earnings Management? Evidence from Italian Family and Non-Family Firms

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  • Giovanna Gavana

    (Department of Economics, University of Insubria, 21100 Varese, Italy
    These authors contributed equally to this work.)

  • Pietro Gottardo

    (Department of Economics and Management, University of Pavia, 27100 Pavia, Italy
    These authors contributed equally to this work.)

  • Anna Maria Moisello

    (Department of Economics and Management, University of Pavia, 27100 Pavia, Italy
    These authors contributed equally to this work.)

Abstract

This paper addresses the issue of financial communication quality by studying the determinants of earnings management practices in family and non-family businesses. Previous literature has highlighted the effect of a company’s size, as a form of visibility, on earnings management practices. This study focuses on the analysis of the relationship between different forms of visibility—exposure to financial press, proximity to the consumer, size of assets, sales and firm age—and earnings quality. The results show that the forms of visibility taken into consideration have a different effect on earnings management practices. Furthermore, they show that family businesses are less likely to resort to these unethical practices, especially in the presence of financial press exposure and proximity of the business to the consumer.

Suggested Citation

  • Giovanna Gavana & Pietro Gottardo & Anna Maria Moisello, 2019. "What Form of Visibility Affects Earnings Management? Evidence from Italian Family and Non-Family Firms," Administrative Sciences, MDPI, vol. 9(1), pages 1-14, March.
    • Handle: RePEc:gam:jadmsc:v:9:y:2019:i:1:p:20-:d:210942
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