Essays on Earnings Quality in Private Firms
On Friday January 15 Charlotte Haugland Sundkvist will hold a trial lecture on a prescribed topic and defend her thesis for the PhD degree at NHH.
Prescribed topic for the trial lecture:
«Corporate Governance in Private Firms»
Trial lecture:
10:15, Zoom / Aud C, NHH
Title of the thesis:
«Essays on Earnings Quality in Private Firms»
Summary:
This PhD dissertation examines earnings quality in private firms through a series of four papers. The earnings quality literature has mainly focused on public firms, and since private firms are fundamentally different from public firms, the results from public firms may not be applicable to private firms. Private firms are more closely held, and family ties among owners, managers and board members are more common. This dissertation explores these unique features of private firms and their consequences for earnings quality.
The first paper examines how earnings quality varies with ownership structure in private family firms. The results indicate that family firms fully owned by the family have higher earnings quality than family firms partly owned by the controlling family, and that earnings quality increases with the ownership of the second largest owner.
Family owners may identify strongly with the family firm, which may affect reporting decisions. The second paper examines whether earnings quality differs when the family name is included in the firm name. The results show that these firms have less accrual based earnings management, and are more likely to select real earnings management over accrual based earnings management.
Reporting of impairment losses in family controlled firms is the focus of the third paper. The findings in this paper suggest that family controlled firms are less likely to report impairment losses, and report lower impairment losses, compared to non-family controlled firms. Results from analyses of family controlled firms also suggest that the likelihood to report impairment losses and the reported impairment amount increase with board independence (i.e. not family members).
The last paper examines the effect of an external shock to performance on earnings quality in private firms, and finds lower earnings quality for the firms affected by this shock. A negative shock to performance may trigger incentives to manipulate earnings upwards to mitigate the effect on earnings.
Defense:
12:15,Aud C / Zoom
Members of the evaluation committee:
Professor Frøystein Gjesdal, NHH (chair of the committee), Department of Accounting, Auditing and Law, NHH
Assistant Professor Anna Rossi, University of Oulu, Oulu Business School
Assistant Professor Han Wu, HEC Paris
Supervisors:
Professor Kjell Henry Knivsflå (main supervisor), Department of Accounting, Auditing and Law, NHH
Professor Tonny Stenheim, University of South-Eastern Norway
The trial lecture and thesis defence will be open to the public.