Earnings Quality of Private and Public Firms: Business Groups versus Stand-Alone Firms

2016 ◽  
Author(s):  
Massimiliano Bonacchi ◽  
Antonio Marra ◽  
Paul Zarowin
Keyword(s):  
Earnings Quality ◽  
Business Groups ◽  
Public Firms ◽  
Private And Public

Organizational structure and earnings quality of private and public firms

2019 ◽  
Vol 24 (3) ◽  
pp. 1066-1113 ◽  
Author(s):  
Massimiliano Bonacchi ◽  
Antonio Marra ◽  
Paul Zarowin
Keyword(s):  
Organizational Structure ◽  
Earnings Quality ◽  
Public Firms ◽  
Private And Public

Does Public Ownership of Equity Improve Earnings Quality?

2010 ◽  
Vol 85 (1) ◽  
pp. 195-225 ◽  
Author(s):  
Dan Givoly ◽  
Carla K. Hayn ◽  
Sharon P. Katz
Keyword(s):  
Private Equity ◽  
Earnings Quality ◽  
Litigation Risk ◽  
Opportunistic Behavior ◽  
Publicly Traded ◽  
Public Firms ◽  
Quality Reporting ◽  
Accounting Numbers ◽  
Public Equity

ABSTRACT: We compare the quality of accounting numbers produced by two types of public firms—those with publicly traded equity and those with privately held equity that are nonetheless considered public by virtue of having publicly traded debt. We develop and test two hypotheses. The “demand” hypothesis holds that earnings of public equity firms are of higher quality than earnings of private equity firms due to stronger demand by shareholders and creditors for quality reporting. In contrast, the “opportunistic behavior” hypothesis posits that public equity firms, because their managers have a greater incentive to manage earnings, have lower earnings quality than their private equity peers. The results indicate that, consistent with the “opportunistic behavior” hypothesis, private equity firms have higher quality accruals and a lower propensity to manage income than public equity firms. We further find that public equity firms report more conservatively, in line with their greater litigation risk and agency costs.

Earnings Quality of Indonesian Family Businesses

2015 ◽  
Vol 21 (4) ◽  
pp. 890-893
Author(s):  
Rosaline Tandiono
Keyword(s):  
Family Business ◽  
Earnings Quality ◽  
Agency Problem ◽  
Family Businesses ◽  
Earnings Persistence ◽  
Type Ii ◽  
Public Firms ◽  
Earnings Predictability ◽  
Reported Earnings

Many Indonesian firms started from family business. Many of them are now big public firms that contribute significantly to the Indonesian economy. As public firms, their reports are used by investors to value their traded shares. A firm’s reported earnings are important information for investors. This study aims to examine the earnings quality of Indonesian listed family businesses and compare this information with their counterparts. Using earnings persistence and predictability as proxies for earnings quality, this study finds that the earnings of Indonesia family businesses are less persistent than their counterpart’s earnings, due to type II agency problem and business diversification. However, there is no difference found in earnings predictability of both businesses. Thus, this study concludes that Indonesian family businesses have poor earnings quality compared to their counterparts.

Economic Links and the Spillover Effect of Earnings Quality on Market Risk

2017 ◽  
Vol 92 (6) ◽  
pp. 213-245 ◽  
Author(s):  
Mark (Shuai) Ma
Keyword(s):  
Information Quality ◽  
Factor Model ◽  
Earnings Quality ◽  
Spillover Effect ◽  
Market Risk ◽  
Data Availability ◽  
Cross Sectional ◽  
Conditional Capm ◽  
Public Firms

ABSTRACT Based on the theoretical framework of Lambert, Leuz, and Verrecchia (2007), I predict that higher earnings quality of economically related public firms reduces a firm's systematic market risk. Using alternative sets of economically related firms, this study provides significant evidence consistent with my prediction. Specifically, a conditional CAPM regression shows that not only a firm's earnings quality, but also the earnings quality of related public firms lowers the loading of firm excess return on the market factor. Regressions based on the three-factor model provide similar results. Further, I provide evidence on cross-sectional variations in the effect of related firms' earnings quality. These results are economically significant and robust in several additional tests. Overall, this study contributes to the literature by providing the first evidence on the long-term externalities of financial information quality in the capital market. Data Availability: All analyses are based on publicly available data.

scholarly journals Measuring earnings quality: Evidence from New Zealand

2011 ◽  
Vol 7 (1) ◽  
pp. 24-32
Author(s):  
Muhammad Nurul Houqe ◽  
Tahmin Fatema Islam
Keyword(s):  
New Zealand ◽  
Earnings Management ◽  
Earnings Quality ◽  
Final Conclusion ◽  
High Quality ◽  
Public Firms ◽  
Different Dimensions ◽  
Basic Approaches ◽  
Quality Evidence

We utilize two basic approaches to measure the quality of earnings which control two different dimensions of earnings management. The research design is structured primary on the basis of calculating two different measures of the quality of earnings on the industry level and on the company level. We calculate earnings quality for New Zealand public firms from the OSIRIS (http://www.osiris.com) database for 2004-2007. This research concludes that various stakeholders should apply more than one measure for the quality of earning in order to have strong evidence about the level of quality before taking any corrective action or making any decision related to that company. If one company is having low quality of earning according to one technique and high quality of earnings according to another, the stakeholders cannot have a final conclusion about that company and they need more investigations and analysis to assess the quality of earnings

A Study of the Earnings Quality of Family Firms

2011 ◽  
Author(s):  
Stefano Mengoli ◽  
Federica Pazzaglia ◽  
Elena Sapienza
Keyword(s):  
Family Firms ◽  
Earnings Quality

U.S.-Listed Foreign Companies' Choice of a U.S.-Based versus Home Country-Based Big N Principal Auditor and the Effect on Audit Fees and Earnings Quality

2015 ◽  
Vol 29 (3) ◽  
pp. 631-666 ◽  
Author(s):  
Sharad C. Asthana ◽  
K. K. Raman ◽  
Hongkang Xu
Keyword(s):  
Financial Reporting ◽  
Home Country ◽  
Earnings Quality ◽  
Audit Fees ◽  
Foreign Companies ◽  
Two Factors ◽  
Just Price ◽  
Reporting Environment ◽  
The U.S

SYNOPSIS We examine why U.S.-listed foreign companies choose to have a U.S.-based (rather than home country-based) Big N firm as their principal auditor for SEC reporting purposes and the effects of that choice for audit fees and earnings quality. We find that the likelihood of the Big N principal auditor being U.S.-based is decreasing in client size and the level of investor protection in the home country, and increasing in the proportion of income earned outside the home country. We also find compelling evidence that U.S.-based Big N auditors are associated with higher-quality earnings (albeit for a higher fee), despite two factors—the greater distance between the U.S.-based (vis-à-vis home country-based) Big N auditor and the client, and the likelihood that much of the audit work is done outside the U.S.—which potentially could lower the earnings quality of the U.S.-listed foreign client when the Big N principal auditor is U.S.-based. Overall, our study suggests that the higher fees associated with a U.S.-based Big N principal auditor is not just price protection; rather, U.S.-based Big N principal auditors are also improving the financial reporting environment by reporting higher-quality audited earnings for their U.S.-listed foreign clients. JEL Classifications: L11; L15; M42.

Urban Transport

2018 ◽  
Author(s):  
José van
Keyword(s):  
Urban Areas ◽  
Urban Transport ◽  
Transport Sector ◽  
Public And Private ◽  
Transport Services ◽  
Ride Sharing ◽  
The World ◽  
Private And Public ◽  
Selection Mechanisms

Platformization affects the entire urban transport sector, effectively blurring the division between private and public transport modalities; existing public–private arrangements have started to shift as a result. This chapter analyzes and discusses the emergence of a platform ecology for urban transport, focusing on two central public values: the quality of urban transport and the organization of labor and workers’ rights. Using the prism of platform mechanisms, it analyzes how the sector of urban transport is changing societal organization in various urban areas across the world. Datafication has allowed numerous new actors to offer their bike-, car-, or ride-sharing services online; selection mechanisms help match old and new complementors with passengers. Similarly, new connective platforms are emerging, most prominently transport network companies such as Uber and Lyft that offer public and private transport options, as well as new platforms offering integrated transport services, often referred to as “mobility as a service.”

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