Özet:

Business groups, which can be defined as legally independent firms’ bonds with various official and informal ties, also bring agency problem concerns due to their complex structure. Group structure, which provides more freedom to intervene in the financial reporting process, gives company managers more initiative over minority shareholder rights. The importance of earnings management practices, which provide clues about the quality of earnings and the reliability of financial statements, increases more in the presence of complex pyramid structures seen in group companies. In this study, the earnings management practices of a group of affiliated and independent companies were determined quantitatively by using the data of companies operating in the BIST between the years 2014-2019. The modified Jones Model was used to determine earnings management practices. The results of the analysis show that earnings management practices are less likely in companies where the controlling shareholder is a big business group or companies with foreign ownership, while the opposite is true for independent companies. The results indicate that the institutionalization level and prestige of the companies are more important than the ownership structure in determining the quality of earnings in the case of Turkey.

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