Family control, board independence and earnings management : Evidence based on Hong Kong firms

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Original languageEnglish
Pages (from-to)281-300
Journal / PublicationJournal of Accounting and Public Policy
Issue number4
Publication statusPublished - Jul 2009


In this study, we document that independent corporate boards of Hong Kong firms provide effective monitoring of earnings management, which suggests that despite differences in institutional environments, corporate board independence is important to ensure high-quality financial reporting. The findings also show that the monitoring effectiveness of corporate boards is moderated in family-controlled firms, either through ownership concentration or the presence of family members on corporate boards. The results based on firms reporting small earnings increases provide additional support for our finding that the monitoring effectiveness of independent corporate boards is moderated in family-controlled firms. © 2009 Elsevier Inc. All rights reserved.

Research Area(s)

  • Corporate governance, Earnings management, Earnings quality, Family board members, Family ownership concentration