Financial reporting in family firms: a socioemotional wealth approach toward information quality. (4th July 2022)

• Record Type: Journal Article
• Authors: Calabrò, Andrea; Cameran, Mara; Campa, Domenico; Pettinicchio, Angela
• Is Part Of: Journal of small business management. Volume 60:Number 4(2022)
• Page Start: 926
• Page End: 960
• Publication Date: 2022-07-04
• Subjects: Family firms -- socioemotional wealth -- financial reporting -- information quality -- International Financial Reporting Standards (IFRS); Small business -- Management -- Periodicals; 658.022
• DOI: 10.1080/00472778.2020.1745003
• Languages: English
• ISSNs: 0047-2778

Abstract

ABSTRACT: The strategic choices of family firms are influenced by economic and noneconomic reference points. We contend that the preservation of the affect-related values a family derives from its ownership position in a firm (that is, socioemotional wealth [SEW]) affects financial reporting quality and earnings management strategies. Using the voluntary International Financial Reporting Standards (IFRS) adoption by Italian unlisted family firms as a natural laboratory setting, we found that the level of SEW endowment impacts on financial reporting quality. Furthermore, we observe that IFRS adoption is associated with less accrual, but higher real activity manipulation for increasing levels of SEW endowment.