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Has Regulation G Improved the Information Quality of Non-GAAP Earnings Disclosures?

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경영연구소 (Management Research Center)|2012.12|Seoul Journal of Business|제18권 제2호|pp. 95-146|DOI 10.35152/snusjb.2012.18.2.004

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키워드

Non-GAAP (Pro-forma) EarningsRegulation GSarbanes-Oxley Act of 2002Strategic DisclosuresEarnings Informativeness

초록

Based on hand-collected non-GAAP earnings disclosures from 2001 to mid 2004, this paper finds that firms with communication motives, proxied by historically low returns-GAAP earnings relation, are more likely to disclose non-GAAP earnings in the post-Reg G period than in the pre- Reg G period. In contrast, firms with opportunistic motives, proxied by GAAP loss and negative GAAP EPS changes, are less likely to disclose non- GAAP earnings in the post-Reg G period than in the pre-Reg G period. With additional test results, the findings of this paper appear consistent with Congress’ and the SEC’s intervention in pro-forma reporting practices resulting in improvements in the quality of information provided in non- GAAP earnings disclosures.

Abstract

Based on hand-collected non-GAAP earnings disclosures from 2001 to mid 2004, this paper finds that firms with communication motives, proxied by historically low returns-GAAP earnings relation, are more likely to disclose non-GAAP earnings in the post-Reg G period than in the pre- Reg G period. In contrast, firms with opportunistic motives, proxied by GAAP loss and negative GAAP EPS changes, are less likely to disclose non- GAAP earnings in the post-Reg G period than in the pre-Reg G period. With additional test results, the findings of this paper appear consistent with Congress’ and the SEC’s intervention in pro-forma reporting practices resulting in improvements in the quality of information provided in non- GAAP earnings disclosures.

참고문헌 (68)

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