SEC interventions and the frequency and usefulness of non-GAAP financial measures

SEC interventions and the frequency and usefulness of non-GAAP financial measures This paper examines the effect of two Securities and Exchange Commission regulatory interventions related to disclosure of non-GAAP financial measures. There are three main results. First, the probability of disclosure of non-GAAP earnings declines in 2003, but the probability of disclosure of other non-GAAP financial measures has an accelerated decline after the first intervention. Second, all else equal, after Regulation G, investors have a positive market reaction to the disclosure of non-GAAP earnings. Finally, investors react to the adjustments made by I/B/E/S financial analysts as they do to the GAAP surprise, but they do not react to the additional adjustments made by firms. Review of Accounting Studies Springer Journals

SEC interventions and the frequency and usefulness of non-GAAP financial measures

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Kluwer Academic Publishers-Plenum Publishers
Copyright © 2006 by Springer Science+Business Media, LLC
Business and Management; Accounting/Auditing; Corporate Finance; Public Finance
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