Social Responsibility Journal, volume 17, issue 1, pages 69-86

Corporate social responsibility, family ownership and earnings management: the case of Indonesia

Rini Kumala ¹

Sylvia Veronica Siregar ²

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Univ. of Indonesia |

Department of Accounting

Publication type: Journal Article

Publication date: 2020-01-29

Emerald

Journal: Social Responsibility Journal

scimago Q1

SJR: 0.844

CiteScore: 7.3

Impact factor: 2.9

ISSN: 17471117, 1758857X

DOI: 10.1108/SRJ-09-2016-0156

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Social Sciences (miscellaneous)

General Business, Management and Accounting

Abstract

Purpose

This paper aims to examine the association of corporate social responsibility (CSR), family ownership and earnings management.

Design/methodology/approach

The authors specifically examine mining companies listed in Indonesia Stock Exchange during 2012-2014. Total observations are 105 firm-years. Research data are collected from sustainability reports, annual reports and annual financial statements. Data are analysed using panel data regression.

Findings

The evidence suggests a negative association between corporate social responsibility disclosures (CSRDs) and earnings management. The authors also examine the direct and moderating role of family ownership. The authors find a positive association between family ownership and earnings management. In addition, family ownership strengthens the negative association between CSR and earnings management.

Research limitations/implications

This research only examines mining companies listed in Indonesia Stock Exchange, which limit the generalisation of the results.

Practical implications

The results should useful for: investors wishing to use the level of CSRD as an indicator of firm ethics, especially in relation to family-owned firms; capital-market regulators wishing to improve market transparency by introducing requirements to encourage more CSRD; and other users of financial statements, especially financial analysts to consider ownership structure, specifically family ownership.

Originality/value

Previous studies have mainly focussed on companies in the USA. This paper adds to the body of knowledge regarding whether the positive relationship between family ownership and CSR is also present outside the USA, especially in emerging countries. Further, this study examines the effect of family ownership on the association of CSR and earnings management, which rarely examined in previous studies.

Found

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Publisher

Emerald

Journal

Social Responsibility Journal

scimago Q1

SJR

0.844

CiteScore

7.3

Impact factor

2.9

ISSN

17471117 (Print, Electronic)

1758857X (Electronic)

Corporate social responsibility, family ownership and earnings management: the case of Indonesia

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