Family-Owned Enterprises and Their Influence on Earnings Management Practices: The Moderating Role of Business Strategy
DOI:
https://doi.org/10.30872/miceb.v7i1.15577Keywords:
Family Ownership, Earnings Management, Business Strategy, Moderating EffectAbstract
In this research, we analyze the impact of family ownership on earnings management and also examine the moderating effect of business strategy in family owned companies registered at the Indonesia Stock Exchange (IDX) over 2021–2023 years. Based on Agency Theory and Resource-Based View (RBV), we postulate that ownership concentration and strategic orientation interact in the determination of managerial incentives for financial reporting. Earnings management is estimated using discretionary accruals, according to Modified Jones Model, in a sample of 17 family held firms (51 firm year observations) and moderating impacts are examined with the help of MRA. The results show that family firms listed on the stock exchange have a significant negative effect on earnings management, implying that high concentration level of family ownership environment reduces the opportunistic reporting behavior. In addition, business strategy moderates the relationship to a great extent, suggesting that the strategic orientation determine how much family ownership hinder earnings management behaviour. The findings of our research contribute to previous literature by showing the contingent nature of family ownerships’ governance role on firm’s strategic orientation and, in so doing, we extend Agency Theory through a Resource-Based View. Theoretically, the study is also useful for auditors, investors and regulators to evaluate risks of financial reporting on family firms
References
Adıgüzel, H. (2013). Corporate governance, family ownership and earnings management: Emerging market evidence. Journal of Accounting in Emerging Economies, 3(2), 157–176.
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120.
Bentley, K. A., Omer, T. C., & Sharp, N. Y. (2013). Business strategy, financial reporting irregularities, and audit effort. Contemporary Accounting Research, 30(2), 780–817.
Chen, S., Chen, X., & Chen, S. (2014). Conservatism and equity ownership of the founding family. Journal of Accounting and Economics, 58(2–3), 193–213.
Dechow, P. M., Sloan, R. G., & Sweeney, A. P. (1995). Detecting earnings management. The Accounting Review, 70(2), 193–225.
Grant, R. M. (1991). The resource-based theory of competitive advantage: Implications for strategy formulation. California Management Review, 33(3), 114–135.
Houqe, M. N., van Zijl, T., Dunstan, K., & Karim, A. W. (2013). The effect of IFRS adoption and investor protection on earnings quality around the world. The International Journal of Accounting, 48(3), 333–355.
Wahyudi, I., Kholid, M. N., & Prabowo, R. A. (2025). Strategic posture, family ownership and earnings management: Evidence from Indonesia. Asian Journal of Business and Accounting, 18(1), 33–52.
National Peer-Reviewed Journals
Ghozali, I., & Ratmono, D. (2020). Analisis multivariat dan ekonometrika: Teori, konsep, dan aplikasi dengan EViews 10 (2nd ed.). Semarang: Badan Penerbit Universitas Diponegoro.
Ke, Y., & Valentino, R. (2025). Pengaruh ownership structure terhadap earnings management. Jurnal Akuntansi dan Teknologi Informasi, 18(1), 46–56.
Muntahanah, S., Kusuma, H., Harjito, D. A., & Arifin, Z. (2021). The effect of family ownership and corporate governance on firm performance: Evidence from Indonesia. Journal of Asian Finance, Economics and Business, 8(5), 697–706. https://doi.org/10.13106/jafeb.2021.vol8.no5.0697.
Nasution, A. W., & Nurcholisah, K. (2020). Pengaruh modal intelektual terhadap kinerja keuangan dengan strategi bisnis sebagai variabel moderating. Jurnal Riset Akuntansi dan Keuangan, 8(2), 186–190.
Nurwati, N., Saputra, B., & Arifin, R. E. (2023). Pengaruh strategi bisnis, karakteristik perusahaan, dan tax planning terhadap manajemen laba. Journal of Information System, Applied, Management, Accounting and Research, 7(4), 1003–1023 https://doi.org/10.52362/jisamar.v7i4.1254.
Pratama, Y. D., Hernawati, E., & Widiastuti, N. P. E. (2023). Praktik manajemen laba pada perusahaan manufaktur kepemilikan keluarga di Indonesia. Syntax Literate: Jurnal Ilmiah Indonesia, 7(9), 15986–16003. https://doi.org/10.36418/syntax-literate.v7i9.13772.
Rudiyanto, R., et al. (2023). Pengaruh corporate governance, struktur kepemilikan, dan ukuran perusahaan terhadap manajemen laba. Jurnal Akuntansi dan Keuangan, 10(1), 1–15.
Savitri, D., & Priantinah, D. (2019). Pengaruh leverage terhadap manajemen laba dengan corporate governance sebagai variabel pemoderasi. Nominal: Barometer Riset Akuntansi dan Manajemen, 8(2), 179–193. https://doi.org/10.21831/nominal.v8i2.26543.
Wahyudi, D., Ulfah, Y., & Setiawati, L. (2025). Determinants of earnings management in family companies listed on the Indonesia Stock Exchange. Journal of Accounting and Finance Studies, 2(1), 32–42.
Wanda, W., Zulahawati, Z., Rusmin, R., & Astami, E. W. (2022). Pengaruh kepemilikan keluarga dan tata kelola perusahaan terhadap praktik manajemen laba. Jurnal Akuntansi Bisnis, 22(1), 1–15. https://doi.org/10.20961/jab.v22i1.700.
Widyasari, P. A., Harindahyani, S., & Rudiawarni, F. A. (2017). Strategi bisnis dalam praktik manajemen laba pada perusahaan manufaktur di Indonesia. Jurnal Akuntansi dan Keuangan Indonesia, 21(2), 397–411.
Reports and News Sources
Emerald Insight. (2023). Real earnings management in family firms in Indonesia.
PwC. (2024). Laporan dominasi perusahaan keluarga di Indonesia.
Saleh. (2020, July 2). Mengagetkan! Terancam didepak, Tiga Pilar cetak laba Rp1,1 T. CNBC Indonesia. https://www.cnbcindonesia.com.
Sandria, F. (2021, July 26). Review deretan skandal laporan keuangan di pasar saham RI. CNBC Indonesia. https://www.cnbcindonesia.com.
Downloads
Published
Issue
Section
License
Copyright (c) 2025 Renova Ramadina, Mega Norsita
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
