Please use this identifier to cite or link to this item: http://hdl.handle.net/1942/23466
Title: The effect of intrafamily agency conflicts on audit demand in private family firms: The moderating role of the board of directors
Authors: CORTEN, Maarten 
STEIJVERS, Tensie 
LYBAERT, Nadine 
Issue Date: 2017
Source: Journal of Family Business Strategy, 8 (1), p. 13-28
Abstract: While the value of external audits was long considered to be minimal for private family firms, some exceptional studies indicate that external audits are demanded by these firms to reduce the agency conflicts between family and non-family members. Using a sample of Belgian private family firms, this study empirically shows that (high quality) auditors are also hired to mitigate agency conflicts among family members. Since these intrafamily agency conflicts are mainly based on emotions instead of economically rational behavior and are therefore difficult to grasp by compositional proxies, they are identified by the level of family cohesion. Moreover, this study shows that the monitoring effectiveness of the board of directors weakens the association between the level of intrafamily agency conflicts and audit (quality) demand, indicating that the audit demand effect of intrafamily agency conflicts decreases when family firms are able to reduce the related agency costs internally.
Notes: Corten, M (reprint author), Hasselt Univ, Res Ctr Entrepreneurship & Family Finns RCEF, Martelarenlaan 42, B-3500 Hasselt, Belgium. maarten.corten@uhasselt.be; tensie.steijvers@uhasselt.be; nadine.lybaert@uhasselt.be
Keywords: audit demand; private family firms; intrafamily agency conflicts; family cohesion; board of directors
Document URI: http://hdl.handle.net/1942/23466
ISSN: 1877-8585
e-ISSN: 1877-8593
DOI: 10.1016/j.jfbs.2017.01.003
ISI #: 000395603400003
Rights: © 2017 Elsevier Ltd. All rights reserved.
Category: A1
Type: Journal Contribution
Validations: ecoom 2018
Appears in Collections:Research publications

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