Research on Accounting in Family Firms: Past Accomplishments and Future Challenges

Abstract

Accounting practices in family firms, although displaying evident unique features, have received relatively little attention as distinct from their equivalents in publicly held firms. This may have hampered conceptual advancements in both the accounting and the family business literatures. In this article the authors first assess accounting areas in which the “family entity” plays a distinct role and elaborate on important characteristics of these phenomena. They also report evidence suggesting that additional research efforts may illuminate both unresolved issues in the accounting literature and so-far-neglected dimensions of the family business entity. Finally, the authors examine several different avenues for research at the accounting—family business interface and identify common themes among them.

Identity in Family Firms: A Theoretical Analysis of Incentives and Contracts

“…Currently, it is fairly accepted that family firms are less impacted by problems that arise from the separation of ownership and management (Carney, Van Essen, Gedajlovic, & Heugens, 2015;Chrisman, Kellermanns, Chan, & Liano, 2010;Salvato & Moores, 2010;Songini, Gnan, & Malmi, 2013). Existing empirical evidence appears to support this view both for small (Chrisman, Chua, & Litz, 2004) and large family firms (Anderson & Reeb, 2003;Villalonga & Amit, 2006).…”

The role of management accounting in family business succession

“…As a matter of fact, when a family firm reaches the growth stage, which implies analytical decision-making style, growing market share, and product complexity, it is important to present information in a more aggregated and integrated way to be able to analyse situations and choose good strategies (Salvato and Moores, 2010). Francesco understood the need to control internal and external information, and on this basis he reorganized the retail network and sales areas with new marketing policies, new products and labels, and started to sell in foreign markets.…”

“…According to the Chartered Institute of Management Bisogno and Vaia 621 Accountants, a management accounting system is "the process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of information used by management to plan, evaluate and control within an entity and to assure appropriate use of and accountability for its resources" (see also Salvato and Moores, 2010). Scholars have largely defined accounting practices as organizational routines (Nelson and Winter, 1982), while at the same time suggesting investigating management accounting in the context in which it occurs Chapman, 2002, 2007;Burns and Scapens, 2000;Hopwood, 1983).…”

“…Accordingly, Salvato and Moores (2010) call for more studies, proposing several paths of research at the accounting-family business interface. More specifically, they suggest investigating the role of management accounting systems (MASs) in supporting family business succession.…”

“…The literature review of Salvato and Moores (2010) concerning accounting and family business reveals that 47 papers were published between 1989 and 2010: 35 of them concerned financial accounting, 9 were focused on auditing and only 3 papers investigated management accounting in the family business field.…”