Ownership concentration, separation of voting rights from cash flow rights, and earnings management: an empirical study in Canada
In: Canadian journal of administrative sciences: Revue canadienne des sciences de l'administration, Band 25, Heft 1
ISSN: 1936-4490
AbstractDrawing from models of Jones (1991) and Kothari, Leone, and Wasley (2005), this study examines the relationship between Canadian corporate ownership structure and earnings management from 1995 to 1999. There is evidence of a nonmonotonic relationship. The concentration of voting and cash flow rights with the ultimate owner first increases earnings management, but as the level of ownership concentration increases, earnings management decreases. There is also a positive correlation between earnings management and voting and cash flow rights divergence. This is particularly evident when the gap between voting and cash flow rights is high. Copyright © 2008 ASAC. Published by John Wiley & Sons, Ltd.