Earnings management in family firms: current state of knowledge and opportunities for future research

Abstract

Purpose

This paper aims to synthesize the extant research on earnings management in family firms.

Design/methodology/approach

The paper reviews the current state of knowledge about earnings management in family firms, identifying the main theoretical frameworks used in the empirical research on the topic, as well as the main types of said research and its findings.

Findings

Agency theory is identified as the main theoretical framework used. Two major types of research identified in the literature are discussed, namely, earnings management in family firms versus non-family firms and earnings management in different types of family firms.

Originality/value

Important research gaps are identified, and future research priorities are suggested. These pertain to the lack of research on earnings management in different types of family firms, the utility of using qualitative and experimental research, as well as the importance of using theoretical frameworks better able to capture the peculiarities of family firms.

Citation

Paiva, I.S., Lourenço, I.C. and Branco, M.C. (2016), "Earnings management in family firms: current state of knowledge and opportunities for future research", Review of Accounting and Finance, Vol. 15 No. 1, pp. 85-100. https://doi.org/10.1108/RAF-06-2014-0065