ABSTRACTResearch Question/IssueAre companies monitored by common owners (i.e., institutional investors that block‐own [owning 5% or more] several companies in a single industry) more likely than other companies to record goodwill impairments when their assets are overstated?Research Findings/InsightsWe find that companies monitored by common owners are more likely than other companies to record goodwill impairments when their assets are overstated. The monitoring effect is stronger for common owners with a stronger incentive to monitor and with more industry knowledge and stronger for the co‐presence of multiple common owners. Our findings are in line with the notion that common owners have an economy of scale in monitoring and internalize the negative externality of delayed recording of goodwill impairment. We also find that common ownership is associated with lower information asymmetry, which in turn increases the timeliness of goodwill impairment.Theoretical/Academic ImplicationsOur research emphasizes the monitoring role of common ownership in recording goodwill impairments. We find support for the mechanisms enabling common owners to be better monitors.Practitioner/Policy ImplicationsThe prevalence of common ownership has prompted regulatory and societal concerns regarding under‐investment in the oversight of the companies. Our findings documenting the association between common ownership and the timely recording of goodwill impairments are relevant to the ongoing debate regarding the potential costs and benefits of common ownership.