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March 18, 2026The Accounting Review

The Effect of the Separation of Ownership from Control on Accounting Policy Decisions: A Reply.

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Authors

ESE. Daniel Smith

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Implication

This article examines how ownership separation affects income smoothing in firms, suggesting implications for managerial accountability.

Key Points

  • The aim is to analyze how separating ownership from control influences accounting policies, particularly income smoothing mechanisms.
  • Theoretical analysis of managerial control theories.
  • Examination of income adjustment behaviors related to stock ownership levels.
  • Comparison of firms with varying levels of stockholder influence on managerial decisions.
  • Firms with less stockholder control are more likely to engage in income smoothing.
  • Increased managerial control leads to more frequent adjustments in reported income.
  • Firms with absolute owner control exhibit less need for manipulative income smoothing.

Cite This Study

E. Daniel Smith (1979) studied this question.

synapsesocial.com/papers/69ba43584e9516ffd37a47fchttps://doi.org/10.2308/tar-4482697
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Also Consider

Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context:

  1. 1The Effect of the Separation of Ownership from Control on Accounting Policy Decisions: A Comment.1979
  2. 2Determinants of Income Smoothing Practices with Managerial Ownership Structure and Firm Size as Moderators2024
  3. 3Accounting residual control rights, managerial entrenchment and earnings management2026
  4. 4Income Smoothing: The Role of Management.1973 · 11 citations
  5. 5Income Smoothing: An Experiment.1981 · 1 citations