In a sample of large private Spanish subsidiaries, we find that the magnitude of discretionary accruals is significantly higher when the parent company is foreign than when it is local. Our tests support the thesis of recent research on earnings management strategies within multinational...

We study how foreign ownership relates to financial performance in a sample of large privately held Spanish subsidiaries. We find that, although foreign group subsidiaries report higher sales turnover than subsidiaries of local groups, they lose their sales advantage at the operating income...

In a large sample of private Spanish subsidiaries, we observe a significantly greater incidence of modified audit reports in foreign than in local group subsidiaries. Results are consistent with foreign group subsidiaries having lower incentives to avoid receiving modified audit opinions (MAOs)...