S-Space College of Business Administration/Business School (경영대학/대학원) Dept. of Business Administration (경영학과) Seoul Journal of Business (SJB) Seoul Journal of Business Volume 18, Number 1/2 (2012)
Has Regulation G Improved the Information Quality of Non-GAAP Earnings Disclosures?
- YI, HAN
- Issue Date
- Seoul Journal of Business, Vol.18 No.2, pp. 95-145
- Non-GAAP (Pro-forma) Earnings ; Regulation G ; Sarbanes-Oxley Act of 2002 ; Strategic Disclosures ; Earnings Informativeness
- 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 SECs intervention in pro-forma reporting practices resulting in improvements in the quality of information provided in non-
GAAP earnings disclosures.