Corporate life cycle, family firms, and real activities management

Subject Areas : Information Systems

Rasoul keshtkar ¹ , GholamReza Rezaei ² , Amin Bagheri Majd ³

1 - marvdash branch, islamic azad university
2 - Assistant Professor of Accounting, Department of Accounting, Faculty of Management and Economics, University of Sistan and Baluchestan- Iran.
3 - Ph.D. student in Accounting, Azad University, Sari Branch, Sari, Iran.

Received: 2024-01-01 Accepted : 2024-04-05 Published : 2024-02-04

Keywords: Earnings management, Real activities management, Life cycle, Family ownership,

Abstract :

One of the factors that should be considered in important management decisions is corporate life cycle; Accordingly, the purpose of this paper is to examine the effects of corporate life cycle on real activities management by considering the role of family ownership. For statistical analysis, data from 106 firms listed on Tehran Stock Exchange from 2013 to 2022 was used. The results of regression analysis of the study showed that firms in the growth stages engage in a higher levels of real activities management via sales management and production cost management than mature firms. However, in the growth stages, they are engage in a lower levels of real earnings management via discretionary expense management than mature firms. Also, the findings suggest that firms in the decline stages engage in a higher levels of real activities management than mature firms. In addition, family firms can be more aggressive in real activities management than non-family firms. The findings of this paper can be used and interest to investors, auditors, regulators, and academics concerning financial reporting quality and financial statement analysis. They can consider the corporate life cycle in their decisions about evaluating real activities management.