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Throughout, the effects of related-party transactions (RPTs) have been a hot topic in financial markets and corporate governance research. This paper analyzes the theoretical foundation of the effects of RPTs and constructs a new indicator, the quasi-profit margin, to assess the effects of RPTs by studying their impact on the quasi-profit margin. Based on the information asymmetry between transaction parties and the information screening theory, the paper proposes the buying inferior to selling theory, systematically explaining the impact of transaction direction on the effects of RPTs. Subsequently, using panel data from Chinese A-share listed companies from 2016 to 2021, the paper constructs fixed-effects models and conducts empirical studies from both exogenous and endogenous perspectives, employing estimation methods such as high dimensional fixed effects method, two-stage least squares method, and three-stage least squares method. The research indicates that RPTs of Chinese A-share listed companies generally exhibit a tunneling effect, and the transaction direction significantly affects the effects of RPTs. The higher the proportion of RPTs conducted as sellers to the total RPTs, the smaller the overall tunneling effect of the RPTs. This study has implications for reducing the tunneling risk of RPTs and improving corporate governance for listed companies, as well as providing some references for financial regulatory authorities to identify and rectify illegal RPTs. [ABSTRACT FROM AUTHOR]

This research is based on the importance of companies knowing the factors that can affect the value of the firm in accordance with the development of the times so that the company can continue to survive in success in the long term. This study combines factors related to the company's non-financial performance, including sustainability performance such as ESG performance and the use of independent assurance in sustainability reports as well as other non-financial performance such as the quality of external audits, related party transactions, and political connections to determine the influence of these factors on the firm's value. The method used in this study is a panel data regression analysis method using e-views 9 with a sample of companies in the energy and basic materials sectors listed on the Indonesia Stock Exchange (IDX) in 2021-2023. The results of this study show that the quality of external audits, related party transactions, political connections, environmental performance (ESG_Environment), social performance to employees (ESG_Social Employees) and the use of independent assurance in sustainability reports have no effect on firm value while, social performance to the community (ESG_Social Community) and governance performance (ESG_Governance) have a positive effect on firm value. [ABSTRACT FROM AUTHOR]

Related party transactions (RPTs) can serve as channels for the spread of credit risk events among blockchain firms. However, current credit risk-assessment models typically only consider a firm's individual characteristics, overlooking the impact of related parties in the blockchain. We suggest incorporating RPT network analysis to improve credit risk evaluation. Our approach begins by representing an RPT network using a weighted adjacency matrix. We then apply DANE, a deep network embedding algorithm, to generate condensed vector representations of the firms within the network. These representations are subsequently used as inputs for credit risk-evaluation models to predict the default distance. Following this, we employ SHAP (Shapley Additive Explanations) to analyze how the network information contributes to the prediction. Lastly, this study demonstrates the enhancing effect of using DANE-based integrated features in credit risk assessment. [ABSTRACT FROM AUTHOR]

The mixed-ownership reform has been the mainstream for the SOE reform in China, but rarely is known whether this reform can improve the overall profitability of SOEs. Therefore, this paper would like to fill this literature gap by testing the impact of China's ongoing mixed-ownership reform on SOEs profitability.This reform encourages private capital to purchase shares of SOEs, so it can be regarded as a privatization plan for SOEs. Using the Difference-in-Differences (DiD) approach, we treat SOEs undergoing the reform as the treatment group and those not undergoing the reform as the control group. Our results indicate that the reform significantly increases the profitability of reformed SOEs. Mechanism analysis suggests that the reform enhances SOE profitability by reducing redundant workers, administrative fees, and related-party transactions. We also find that the effects of the reform are heterogeneous, with greater impacts observed among SOEs in unregulated industries, local SOEs, and SOEs in areas with low marketization. Overall, our research enriches the literature on privatization and mixed-ownership reform, and also provides empirical evidence to promote mixed-ownership reform. [ABSTRACT FROM AUTHOR]

This paper seeks to investigate how earnings quality is affected by related party transactions (RPTs). The research also examines the impact of ownership structure as a moderating variable on this relationship. Panel data with the firm fixed effects model are utilized in the paper. A sample of 91 non-financial companies listed on the Saudi Stock Exchange between 2018 and 2022 were included, resulting in 429 observations of company performance over that time period. This paper finds that there is a negative association between RPTs and earnings quality. Furthermore, the study found that the adverse effect of RPTs on earnings quality is intensified when there is managerial ownership and institutional ownership as moderating variables. The study's conclusions are robust and reliable, as the sensitivity analysis results reinforce those of the basic analysis. To the authors' knowledge, there is relatively little available evidence on the connection between RPTs and their correlation with earnings quality, particularly in the context of ownership structure acting as a moderating variable. Moreover, the study's findings hold important implications for enhancing earnings quality in developing economies. To the authors' knowledge, no studies have been conducted in Saudi Arabia thus far to investigate the impact of ownership concentration, institutional ownership, managerial ownership, foreign ownership, and state ownership on the association between RPTs and earnings quality. Therefore, this paper expands the literature by modeling how the interaction between ownership structure and related party transactions may influence earnings quality. In this way, the authors contribute to the body of knowledge by unveiling a more robust control mechanism, particularly in developing economies with ineffective markets for corporate control. [ABSTRACT FROM AUTHOR]

Family business groups (FBGs) typically control several member firms and can hire a single auditor or multiple auditors to audit their member firms. This article examines what type of auditor appointment strategy constrains intragroup value transfers within FBGs. Analyzing related-party transactions (RPTs) within FBGs in Hong Kong, this study provides evidence that FBGs with multiple auditors undertake more intragroup value transfers than FBGs with a single auditor. However, the adverse effect of multiple-auditor appointments is mitigated by a stronger board and higher financial reporting comparability among member firms. Using an alternative measure of intragroup value transfers, we also find that the market perceives multiple-auditor appointments as impairing audit effectiveness. Overall, our findings offer the new insight that controlling families can exploit the appointment of multiple auditors as a "divide and conquer" strategy which undermines the monitoring role of auditors against intragroup value transfers, but stronger corporate governance of member firms can mitigate the adverse effect. [ABSTRACT FROM AUTHOR]

We examine bankruptcy within business groups. Groups have incentives to support financially distressed subsidiaries, as the bankruptcy of a subsidiary may impose severe costs on the group as a whole. This is in part because, in several countries, bankruptcy courts often "pierce the corporate veil" and hold groups liable for their distressed subsidiaries' obligations as if they were their own. Using a large cross-country sample of group-affiliated firms, we show that, by reallocating resources within the corporate structure, business groups actively manage intra-group credit risk to prevent costly within-group insolvencies. Moreover, we document that recent regulatory changes in the approval and disclosure of related party transactions are costly for business groups in that they constrain their ability to shield their subsidiaries from credit-risk shocks. Our study informs the current regulatory debate on related party transactions by highlighting an important cost of anti-self-dealing regulation. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to examine the prevalence of transfer pricing and earnings management activities, and how they are impacted by corporate governance mechanisms. Design/methodology/approach: Using the political cost theory, the study provides insights into how opportunistic managerial behaviours which have a strong link to profit shifting and tax evasion are driven by corporate governance using data from 16 listed firms for the period 2008–2020. Findings: The results reveal that the transaction-based transfer pricing model is better than the index-based model and the accrual-based earnings management model suits the political cost theory more than the real earnings management metric. Board size and female CEO increase transfer pricing aggressiveness but board independence, CEO tenure, CEO nationality and female Board Chairwomanship reduce transfer pricing aggressiveness. The findings also reveal the role of multinational enterprise status, private ownership, industry type, firm size, financial leverage, asset tangibility and firm age. For accrual-based earnings management, board independence, CEO tenure, and female Board Chairwomanship significantly decrease earnings management. Other factors include private ownership, firm size, and firm age. Practical implications: The findings of the study are relevant for shaping industry-level policies on earning management, transfer pricing and related-party transactions. Since these opportunistic managerial behaviours are the foremost drivers of tax avoidance and profit shifting, the findings of this study provide relevant insights for practitioners, tax and other regulatory authorities, policymakers and the academic community alike. Originality/value: This is among the premier studies on the transfer pricing and earnings management nexus with corporate governance factors using the political cost theory, especially in the developing country context. It also reveals the significant impact of gender and suggests the need for gender diversity in corporate management. [ABSTRACT FROM AUTHOR]

Managers carry out earnings management with various motives to get the desired profit level so that the company's financial statements do not reflect the actual situation. The purpose of this study is to determine the effect of related party transactions, tax planning, and leverage on earnings management, as well as the role of independent commissioners in moderating this effect. This study tested manufacturing sector companies listed on the Indonesia Stock Exchange during 2016-2019 with a total sample of 220 samples using a purposive sampling method. The type of data used is secondary data obtained from www.idx.co.id. This study uses two panel data regression models, namely models with and without moderation. The results of this study indicate that related party transactions have a negative effect on earnings management, while tax planning and leverage have no effect on earnings management. Furthermore, independent commissioners can moderate the effect of related party transactions, tax planning, and leverage on earnings management. [ABSTRACT FROM AUTHOR]

Copyright of Accounting & Auditing Review is the property of University of Tehran, Faculty of Management and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Problem definition: As related party transactions (RPTs) increase in global supply chains, understanding the impact of corporate governance on such transactions becomes crucial for businesses. RPTs often lead to operational diversion due to power disparities between parent and its subsidiaries. In this study, we explore how operational diversion in RPTs within multinational firms is affected by the roles of foreign subsidiaries and corporate governance mechanisms. Methodology/results: Using a unique data set on RPTs of Korean multinational firms from 2006 to 2013, we compare the performance of multinational firms engaging in RPTs with two types of foreign subsidiaries: vertical and horizontal. We conduct our empirical analysis based on the adoption of International Financial Reporting Standards (IFRS) in Korea in 2011, which acts as a policy shock affecting corporate governance and deterring operational diversion. Our results show that the improvement in operational performance of a multinational firm following the IFRS adoption is more significant when the parent firm engages in transactions with vertical subsidiaries compared with horizontal ones. We further show that strong corporate governance mechanisms, such as internal governance, institutional ownership, and large shareholders, play a crucial role in restraining operational diversion in RPTs involving vertical subsidiaries. Managerial implications: The implications of our study extend to shareholders and auditors, highlighting the importance of prioritizing monitoring efforts concerning a parent firm's RPTs with vertical subsidiaries, especially when corporate governance mechanisms are weak. In contrast, RPTs with horizontal subsidiaries are relatively robust against operational diversion, making them a natural deterrent to such malpractices. Funding: This work was supported by the Institute of Management Research at Seoul National University, the Hankuk University of Foreign Studies Research Fund [2023], and the Research Fellowship Fund of the Sangnam Institute of Management, Yonsei University [2020-22-0007]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/msom.2022.0372. [ABSTRACT FROM AUTHOR]

This article is devoted to the study of certain aspects of control by the tax service over the implementation of controlled transactions by taxpayers. The author summarises the main criteria for transactions that fall under controlled transactions. The author emphasises that controlled transactions are under close scrutiny of the tax authorities. These are transactions involving non-residents and affecting the financial result of taxpayers and are carried out: with related non-residents; with non-residents registered in low-tax jurisdictions; with non-residents whose legal form is included in the relevant list; through non-resident commission agents; between a non-resident and its permanent establishment in Ukraine. Since cross-border pricing is one of the ways to minimise taxes, this increases the interest of the controlling authorities. Attention is drawn to both the type of controlled transaction and the income received by the taxpayer based on the results of the activity, which should be considered in the complex. It is emphasised that the main element of the controlled transaction audit is the correct pricing. In this case, the arm's length principle is used for the audit. The Tax Code of Ukraine clearly defines the conditions under which transactions are recognised as not complying with this principle. The author emphasises that in case of violation of this principle, the financial result is adjusted, which entails additional taxation. In addition, attention is focused on the existence of a business purpose (reasonable economic reason) for the controlled transaction, which can only be present if the taxpayer intends to obtain an economic effect as a result of economic activity. The economic effect mainly implies an increase in the taxpayer's assets and/or their value, as well as the creation of conditions for such an increase (preservation) in the future. Taxpayers should focus on the correct pricing not only as a basis for avoiding a tax offence, but also for proper tax planning. [ABSTRACT FROM AUTHOR]

This study aims to test and analyze the effect of related party transactions on accrual earnings management which is moderated by organizational capital. This study uses manufacturing companies listed on the Indonesian Stock Exchange (BEI) in 2018-2021 using a purposive sampling method. A panel data approach was used to test the hypotheses of this study. The results of this study found that related party transactions had a positive and significant effect on accrual earnings management, while organizational capital cannot strengthen the effect of related party transactions on accrual earnings management. This study has important implications for the development of agency theory. This study shows that agency theory has an important role in creating information asymmetry between shareholders and company management. Information asymmetry triggers managers' actions to manage earnings on an accrual basis through the use of related party transactions. The aim is to improve company management performance, so that managers' motivation to obtain bonuses can be achieved. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to investigate the relationship between the audit committee's (AC) cash compensation and related-party transactions (RPTs). This paper also explores whether the affiliation of directors on the AC has a differential effect on the association between AC members' cash compensation and RPTs. Design/methodology/approach: This paper uses data from Chinese-listed firms for the period from 2007 to 2017 and use the ordinary least square regressions, to test the association between AC cash compensation and RPTs. To alleviate the endogeneity concerns, this paper applies the generalized method of moment, the two-stage least square regression technique and the Granger causality test. Findings: This paper documents a negative association between the AC members' cash compensation and RPTs. The findings reveal that one standard deviation increase in the AC's cash compensation leads to around 0.08% reduction in the amount of RPTs. Further analysis shows that the cash compensation of AC independent directors is negatively associated with RPTs, whereas that of nonindependent directors shows no significant impact. The results remain robust to endogeneity tests. The results might be of interest to both practitioners as well as regulatory bodies and investors. Originality/value: To the best of the authors' knowledge, this study is the first to try to examine the relationship between AC cash compensation and RPTs in the context of China. This study also is the first attempt to consider the affiliation of AC directors by decomposing the AC compensation into independent and nonindependent directors. Also, it adds to the literature on the determinants of RPTs. [ABSTRACT FROM AUTHOR]

This study employs a stochastic production frontier framework to measure productivity growth among exporters, non‐exporters, and firms experiencing ownership changes through mergers and acquisitions in US food manufacturing. Analyzing a panel data set that integrates Economic Censuses and transaction‐level exports, the results reveal the coexistence of more productive exporters, driven by technical efficiency, alongside less productive non‐exporters. Exporters in arm's length transactions show productivity growth driven by technical efficiency change, while those in related party transactions benefit mainly from technological change. Firms undergoing ownership changes exhibit positive productivity growth with a greater contribution from technical efficiency compared to those without such changes. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Governance & Administrative Reform is the property of Universitas Airlangga and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Legal literature in the past has often debated whether concentrated corporate ownership (i.e. sizeable corporate conglomerates and corporate enterprises owned by business families or the government of a State) in a relatively close market leads to a high volume of related party transactions between the corporations in the respective market. The emerging economies attract substantial foreign investment due to the rapid growth of their markets and the presence of large publicly listed companies. Concentrated ownership structures in these countries tend to result in the expropriation of resources by controlling shareholders for their personal enrichment. There has been a high corporate failure rate due to related party transactions, despite the adoption of regulatory reforms that promote transparency, accountability, and fairness. Listed companies in the BRICS countries are marked by concentrated ownership structures controlled by either a family or the State. Although there are differences in ownership structures as well as indications of agency problems in the United States and the United Kingdom, the BRICS countries have adopted the same legal strategies to prevent unfair or abusive related party transactions in their respective countries, such as the appointment of independent directors, independent audit committees, CEO duality, and disclosure requirements. This study seeks to conduct cross-country comparative research to assess the ways in which the BRICS countries have regulated related party transactions. Each of the BRICS countries has adopted different monitoring mechanisms to prevent abusive related party transactions, which will be examined in the course of this research.

We examine the effect of nonfamily leadership in family firms, whereby family members do not act as either a board chair or a CEO, on corporate earnings management. We find that firms with nonfamily leadership conduct significantly more earnings management than firms with family leadership, although this effect can be alleviated by more effective internal control and a stronger reputation concern. Additional analyses show that the increased related-party transactions can be one mechanism through which the nonfamily leadership increases earnings management. We further find that nonfamily leaders in family firms are on average weaker but receive higher (excess) payment than their peers in nonfamily firms, all consistent with the role of the nonfamily member as a marionette for the family's misbehaviors. Moreover, earnings management increases with the degree of family noninvolvement and is mainly driven by nonfamily chairs rather than the CEOs. Overall, our paper suggests that not having a family leader aggravates incentives for the controlling family to manage earnings to realize private benefits. [ABSTRACT FROM AUTHOR]

Based on the analysis of data from listed enterprises in China between 2011 and 2022, we investigate the influence of digital transformation on the governance efficiency for minority shareholders. The results show that the extent of digital transformation exert a negative effect on the agency costs incurred from related-party transactions. The mechanism examination elucidates that digital transformation augments the governance efficiency for minority shareholders by boosting attendance at shareholders' meetings and enhancing the exit threat for minority shareholders. Subsequent analysis reveals that non-state-owned enterprises, compared to state-owned enterprises, exhibit a more pronounced effect in diminishing the second type of agency costs through digital transformation. Furthermore, the impact of digital transformation in curtailing agency costs is more significant in the eastern regions than central and western regions. The better the equity checks and balances in listed enterprises, the more effective digital transformation is in reducing agency costs. This study offers valuable insights for bolstering the governance capacity of minority shareholders in the context of digital transformation. [ABSTRACT FROM AUTHOR]

This research aims to empirically test the relationship between tax avoidance, related party transactions and intellectual capital on dividend policy. Furthermore, this research also tests managerial ownership in moderating tax avoidance, related party transactions and intellectual capital on dividend policy. This type of research is a type of quantitative research using secondary data. The population in this study are real estate companies listed on the Indonesian Stock Exchange (BEI) during 2018-2022. The sampling technique in this research used a purposive sampling technique. Analysis of research data uses moderate regression analysis. The results of this research show that (1) tax avoidance influences dividend policy, (2) related party transactions have a positive influence on dividend policy, (3) intellectual capital influences dividend policy, (4) managerial ownership weakens the relationship between tax avoidance and policy. dividends, (5) Good corporate governance can moderate and strengthen the influence of related party transactions on cash dividends, (6) moderate managerial ownership and strengthen intellectual capital on dividend policy. [ABSTRACT FROM AUTHOR]

This study examines the voting behaviour of independent directors from academia based on manually collected voting data. We find that academic independent directors are less likely to dissent on board proposals than other independent directors, especially the directors who have fewer industry-specific experiences or have a relatively higher pay from the focal firm. The academic directors are also more likely to lose board seats after dissension, consistent with their concern of less job security as they are easily replaced. Lastly, although academic directors generally have weaker incentives to vote against insiders, they are more likely to dissent on proposals concerning related-party transactions. Overall, our study sheds new light on the role of academic independent directors in board monitoring effectiveness. [ABSTRACT FROM AUTHOR]

Copyright of JDM: Jurnal Dinamika Manajemen is the property of Universitas Negeri Semarang, Fakultas Ekonomi, Jurusan Manajemen and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The aim of this study is to investigate the effects of related party transactions and overall business value on capital structure, company size, and an independent board of commissioners. The manufacturing businesses in the food and beverage subsector that were listed on the Indonesia Stock Exchange between 2017 and 2021 are the focus of this study. The research sample consisted of 60 data points from 12 firms that fulfilled predefined parameters, chosen through the use of purposeful sampling. This study employs a quantitative methodology, with Eviews software serving as the analysis tool. The study's findings demonstrate that the value of a firm is not significantly impacted by transactions involving related parties. On the other hand, a company's value is greatly influenced by its size and capital structure. The independent board of commissioners does not lessen the effect that capital structure and related party transactions have on the value of the company. Nonetheless, the effect of a company's size on its value might be lessened by an impartial board of commissioners. The following policies can be implemented by the business world based on the consequences of the research: First, the business sector needs an optimal capital structure, which includes using debt with suitable limits, in order to draw investors and build company value. In addition, using debt might lessen the tax liability of the business. Secondly, in order to draw in investors, big businesses need to manage their assets well. [ABSTRACT FROM AUTHOR]

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

China is actively promoting the development of a robust trading nation. In this context, utilizing data from China's A-share listed companies spanning from 2003 to 2021, this study investigates the impact of foreign shareholders on enterprises in a scenario where overseas sales reduce the profit margin of Chinese firms. The findings reveal that overseas sales do indeed decrease the profit margin of Chinese enterprises; however, foreign shareholders mitigate this negative effect and various robustness tests support this conclusion. Mechanism analysis confirms that foreign shareholders primarily enhance enterprise productivity through improved production technology spillover effects, thereby alleviating the adverse impact of overseas sales on Chinese firms' profit margins. Heterogeneity analysis demonstrates that both longer holding periods for foreign shareholders and multiple foreign shareholders significantly alleviate the negative influence of overseas sales on Chinese firms' profit margins. Moreover, there is significant heterogeneity in how foreign shareholders alleviate these detrimental consequences based on property rights nature, institutional environment, overseas related party transactions and subsidiaries, as well as industry attributes. These findings have important reference value for China's efforts towards becoming a strong trading nation and can contribute to enhancing trade capacity in other countries. [ABSTRACT FROM AUTHOR]

This study examines whether financial affiliates within a nonfinancial business group perform certain roles and functions in tax avoidance by other nonfinancial affiliates or the group as a whole. Financial institutions have tax‐planning expertise and knowledge and thus may assist other affiliates of the same group in avoiding taxes. In addition, regulatory loopholes leave scope for tax avoidance involving financial affiliates. Using 10,659 firm‐year observations from 866 nonfinancial listed firms affiliated with business groups in Korea over the period 2001–2019, I find that firms belonging to nonfinancial groups with financial affiliates exhibit higher levels of tax avoidance than those belonging to nonfinancial groups without financial affiliates. The same result is observed at the group‐level tax avoidance as well as the firm‐level tax avoidance. In addition, I provide evidence that KFTC‐designated business groups subject to tighter regulation engage more in tax avoidance by utilizing financial affiliates in the blind spots of regulation and oversight, and that related‐party transactions (i.e., intragroup transactions) are used as avenues for financial affiliates to help other affiliates in tax avoidance. This study is one of the first empirical studies to shed light on the role of financial affiliates of nonfinancial groups in tax planning. [ABSTRACT FROM AUTHOR]

SUMMARY: We provide evidence on the efficacy of Auditing Standard No. 18 (AS18) for auditing-related party transactions (RPTs). We measure audit quality using general restatements and RPT-related restatements. Using a sample of S&P 1500 firms from 2011 through 2018, we find that RPT firms are significantly less likely to report a general restatement compared with non-RPT firms after AS18. We also classify RPTs into business RPTs and nonbusiness RPTs based on the type of transactions and the transacting party. We find that business RPT firms are (1) less likely to have general restatements after AS18 relative to non-RPT firms and (2) less likely to have RPT-related restatements relative to nonbusiness RPT firms. AS18 does not have any effects on nonbusiness RPTs. Our results are driven by S&P MidCap 400 and S&P SmallCap 600 firms. Overall, our findings suggest that AS18 has enhanced the quality of business RPT auditing. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: M41; M42. [ABSTRACT FROM AUTHOR]

The quest to ensure that the tax planning activities of multinational enterprises operating in Nigeria do not erode the country's domestic tax base has led to the enactment and enforcement of the Transfer Pricing (TP) Regulations, 2018 in Nigeria. The TP Regulation provides for a comprehensive framework to ensure that the pricing of related party transactions is consistent with global best practices on TP. The enforcement of the TP Regulation in Nigeria was taken a step further in 2020 when the Tax Appeal Tribunal affirmed the imposition by the Federal Inland Revenue Service (FIRS) of liability of over one billion naira on Prime Plastichem Nigeria Limited for failing to apply consistent TP methods in the financial years 2013 and 2014. While this decision was hailed as Nigeria's first decision of the Tax Appeal Tribunal (TAT) dealing with transfer pricing, the decision has been criticised for failing to apply the global standards for TP documentation. This article seeks to critique the principles of TP documentation espoused in the Prime Plastichem case vis-à-vis international best practices on transfer pricing documentation. [ABSTRACT FROM AUTHOR]

Previous laboratory and field studies have demonstrated that the dishonesty of commercial transaction participants may depend on subtle cues. In this field study conducted on a sample of 216 shop assistants in Poland, we planned to demonstrate that coronavirus disease-related factors could result in an increased propensity for dishonesty among shop assistants. This investigation is unique in its application of social psychological theories to illuminate hitherto unexplored side effects of combating the coronavirus disease 2019 pandemic. Our supposition was that the potential detriment encountered by individuals wearing solid surgical masks would involve being viewed as more abstract and remote, thereby heightening the likelihood of being deceived by a vendor. Moreover, we examined the potential relationship between the limited number of customers in retail establishments (related to pandemic restrictions) and the unscrupulous practices of sellers—specifically the act of retaining change. The effect of wearing masks was statistically non-significant, whereas the impact of other customers' absence was significant. Moreover, unexpected results related to transaction parties' genders were obtained, showing that shop assistants tended to be more honest when dealing with customers of the same gender. The results are discussed in the context of empathy toward masked customers, self-awareness theory, social norms of honesty, and identification with gender groups. [ABSTRACT FROM AUTHOR]

Corruption is a plague with serious economic and social consequences and has a greater impact than people perceive. The impacts on business are severe but often underestimated. The aim of this paper is to analyze the influence of public governance environment on the strategical opportunistic use of related party transactions in family firms. Considering corruption as a good indicator of conditions that boost unethical behavior, the study investigates whether high standard of public governance quality at a regional level, as well as low corruption, helps to reduce specific types of opportunistic transactions. Based on a regression analysis on European‐listed family firms in Italy, France, and Germany, we find that high public governance quality at the regional level reduces companies' opportunistic transactions. The study addresses a gap in the literature, first, because it empirically shows a link between the quality of the context and some unethical business strategies, confirming that a negative context leaves room for opportunistic behaviors and that high standards in the public governance quality discourage firms' opportunistic behaviors through specific transactions and, second, because it focuses on family firms suggesting that a strong family power that controls strategy and decision‐making process, if operate in a bad public quality context, may be involved in opportunistic behaviors. [ABSTRACT FROM AUTHOR]

This research investigates the influence of Related Party Transactions and Tax Haven Utilization on Tax Avoidance with and without Country-by-Country Reporting regulations, which were introduced in Indonesia at the end of 2016, as moderating variables. This research uses a purposive sampling method as sample selection. The data in this study was collected from the financial reports of 96 multinational companies registered between 2012 and 2021. To test the hypothesis, this study used regression with Random Effect Model. The results of this research are that Tax Haven Utilization has a significant effect on Tax Avoidance and Related Party Transactions have no effect on Tax Avoidance. Other results show that Country-by-Country Reporting regulations are unable to moderate the influence of Related Party Transactions and Tax Haven Utilization on Tax Avoidance. The findings of this research provide recommendations for the government to launch CbCR regulations in order to prevent tax avoidance through mechanisms for utilizing tax havens and related party transactions as well as increasing understanding of the principles of implementing CBCR. [ABSTRACT FROM AUTHOR]

Research regards related party transactions (RPTs) and control-ownership divergence (wedge) as expropriation mechanisms manifesting severe agency conflict in emerging markets. Since corporate governance greatly influences firms' investments and strategic behavior, this study examines how different RPTs and the wedge affect cross-border acquisition (CBA) size and returns. In line with agency theory, opportunistic RPTs like loans/guarantees reduce CBA returns. However, operating RPTs are positively related to returns as the market seems to link these RPTs with benefits to firms. The CBA performance of wedge firms varies with RPT types. While loans/guarantees by wedge firms reduce returns due to combined tunneling incentives, operating RPTs impact returns positively, reflecting more economic benefits in wedge firms. The wedge or RPTs are also positively related to CBA size. But increased tunneling incentives restrain wedge firms that give loans/guarantees from large CBAs. Finally, family firms or large group affiliates that provide loans/guarantees or sustain the wedge reduce returns yet make larger CBAs. Overall, agency costs of expropriation mechanisms depend on RPT types and receive further impetus in family firms or group affiliates with extensive intra-group linkages. [ABSTRACT FROM AUTHOR]

Related‐party transactions (RPTs) and transfer pricing techniques are typically used by multinational enterprises to reduce their tax obligations by shifting the income to zero or to low‐tax countries. These techniques have thrived and have emerged as a significant concern for tax authorities. This study investigates the effect of tax haven utilisation on related‐party sales pricing in a sample of Australian listed firms. We find that tax haven use is positively and significantly associated with related‐party sales pricing. Moreover, we identify a positive and significant interaction between tax havens and earnings management with related‐party sales pricing. Ownership concentration and its interaction effect with tax havens are significant predictors of the increased use of related‐party sales pricing. Overall, the empirical findings demonstrate that earnings management, a high level of ownership concentration and the use of tax havens are substantial factors that enable firms to obtain tax benefits via the use of RPTs. [ABSTRACT FROM AUTHOR]

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper seeks to investigate how earnings quality is affected by related party transactions (RPTs). The research also examines the impact of ownership structure as a moderating variable on this relationship. Panel data with the firm fixed effects model are utilized in the paper. A sample of 91 non-financial companies listed on the Saudi Stock Exchange between 2018 and 2022 were included, resulting in 429 observations of company performance over that time period. This paper finds that there is a negative association between RPTs and earnings quality. Furthermore, the study found that the adverse effect of RPTs on earnings quality is intensified when there is managerial ownership and institutional ownership as moderating variables. The study’s conclusions are robust and reliable, as the sensitivity analysis results reinforce those of the basic analysis. To the authors’ knowledge, there is relatively little available evidence on the connection between RPTs and their correlation with earnings quality, particularly in the context of ownership structure acting as a moderating variable. Moreover, the study’s findings hold important implications for enhancing earnings quality in developing economies. To the authors’ knowledge, no studies have been conducted in Saudi Arabia thus far to investigate the impact of ownership concentration, institutional ownership, managerial ownership, foreign ownership, and state ownership on the association between RPTs and earnings quality. Therefore, this paper expands the literature by modeling how the interaction between ownership structure and related party transactions may influence earnings quality. In this way, the authors contribute to the body of knowledge by unveiling a more robust control mechanism, particularly in developing economies with ineffective markets for corporate control.