GOVERNANCE IN FAMILY BUSINESSES AND THE ISSUE OF MEASURING EARNINGS MANAGEMENT: EXPLORING THE INTERACTION

The management of results in family businesses (FB) has been widely studied due to the specific governance structures that blend family ties and professional management practices. This research examines the role of governance in shaping earnings management practices, focusing on how family ownership and governance systems influence the use of discretionary accruals. By analysing different earnings management models, including those of Jones (1991), Dechow (1995), Kasznik (1999) and Kothari, Leone & Wasley, (2005), this work aims to identify the most effective approach to detect discretionary accruals. The study focused on data from 103 family businesses in Algeria, offering insights into the specific dynamics of earnings management. The results demonstrate that earnings management in family businesses is strongly influenced by governance factors such as board independence, ownership concentration, and board size. The results indicate that family businesses prioritize long-term sustainability and the preservation of legacy, which can lead to unique forms of profit.