| Abstract [eng] |
Capital financing is vital for the development of the new EU countries. Investors base their economic and financial decisions on the information available in the financial reports that listed EU companies must prepare following International Financial Reporting Standards (IFRS). Studies show that the majority of public companies worldwide are family owned and face Type II Agency Problem - the conflict between minority shareholders and large controlling shareholders, i.e. Controlling family may seek to extract private benefits at the expense of minority shareholders, make contracts with related parties not according to arm’s length principle and disclose information in financial reports for self-interested purposes to avoid minority contests. After privatization new EU countries in general are characterized by concentrated ownership as well as weak minority shareholders protection (Aoki, 1995), which meets de Silanes (1998) findings, that concentration of ownership of shares in the largest public companies is negatively related to investor protections. The Research of Type II Agency Conflict effects on mandatory IFRS disclosure levels in the new EU countries is limited, so due to weak minority protection in the new EU countries Type II agency conflict is evermore important, and therefore, this study investigates the disclosure of inside information to third parties (24 IAS „Related parties disclosure“) in family controlled businesses in new EU countries. |
