Discriminatory related party transactions: a new measure
International Journal of Accounting & Information Management
ISSN: 1834-7649
Article publication date: 2 October 2017
Abstract
Purpose
The purpose of this study is to develop a new measure for discriminatory related party transactions (DRPTs). There are currently measures for such discriminatory transactions but the new measure has a strong theoretical basis and is less susceptible to measurement error.
Design/methodology/approach
This paper develops and tests a new measure for these discriminatory transactions. Type I and Type II error rates and the power of the new measure are compared with an existing measure using computer-simulated and real data.
Findings
The capital market sensitivity of the new measure is also tested and compared with the existing measure. The new measure is found to be superior.
Practical implications
The new measure of DRPTs has the potential to contribute to both further research on the impact of related party transactions and policy-making in relation to DRPTs.
Originality/value
This paper has developed and tested a new measure for DRPTs.
Keywords
Acknowledgements
The authors thank Ross Watts, David Emanuel and Peter Clarkson for their helpful comments on earlier versions of the paper. The authors are grateful for the comments made by the participants at the 2013 Financial Markets and Corporate Governance Conference (especially the discussant), and the 2016 AFAANZ Conference, Gold Coast, Australia.
Citation
Tareq, M., Houqe, M.N., van Zijl, T., Taylor, D.W. and Morley, C. (2017), "Discriminatory related party transactions: a new measure", International Journal of Accounting & Information Management, Vol. 25 No. 4, pp. 395-412. https://doi.org/10.1108/IJAIM-10-2016-0102
Publisher
:Emerald Publishing Limited
Copyright © 2017, Emerald Publishing Limited