The role of institutional and economic factors in the strategic use of non-GAAP disclosures to beat earnings benchmarks

Detalhes bibliográficos
Autor(a) principal: Isidro, H.
Data de Publicação: 2015
Outros Autores: Marques, A.
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
Texto Completo: http://hdl.handle.net/10071/8912
Resumo: We use hand-collected data for a sample of large European firms to investigate the influence of countries’ institutional and economic factors on managers’ non-generally accepted accounting principles (GAAP) disclosures. We find that managers are more likely to use non-GAAP measures to meet or beat earnings benchmarks that GAAP earnings would miss in countries with efficient law and enforcement, strong investor protection, developed financial markets, and good communication and dissemination of information. We also find that managers in countries with developed institutional and economic conditions are more likely to adjust non-GAAP earnings for recurring expenses such as R&D, depreciation, and stock-based compensation expenses. Our findings suggest that in environments in which there is more pressure to achieve earnings benchmarks and less opportunity to manipulate GAAP earnings, managers use more non-GAAP earnings disclosures to meet the benchmarks
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spelling The role of institutional and economic factors in the strategic use of non-GAAP disclosures to beat earnings benchmarksPro forma earningsAlternative earningsConsensusProfitWe use hand-collected data for a sample of large European firms to investigate the influence of countries’ institutional and economic factors on managers’ non-generally accepted accounting principles (GAAP) disclosures. We find that managers are more likely to use non-GAAP measures to meet or beat earnings benchmarks that GAAP earnings would miss in countries with efficient law and enforcement, strong investor protection, developed financial markets, and good communication and dissemination of information. We also find that managers in countries with developed institutional and economic conditions are more likely to adjust non-GAAP earnings for recurring expenses such as R&D, depreciation, and stock-based compensation expenses. Our findings suggest that in environments in which there is more pressure to achieve earnings benchmarks and less opportunity to manipulate GAAP earnings, managers use more non-GAAP earnings disclosures to meet the benchmarksRoutledge/Taylor and Francis2015-05-12T11:20:25Z2015-01-01T00:00:00Z20152019-05-02T12:16:44Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10071/8912eng0963-818010.1080/09638180.2014.894928Isidro, H.Marques, A.info:eu-repo/semantics/embargoedAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-11-09T17:44:56Zoai:repositorio.iscte-iul.pt:10071/8912Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T22:21:22.955175Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse
dc.title.none.fl_str_mv The role of institutional and economic factors in the strategic use of non-GAAP disclosures to beat earnings benchmarks
title The role of institutional and economic factors in the strategic use of non-GAAP disclosures to beat earnings benchmarks
spellingShingle The role of institutional and economic factors in the strategic use of non-GAAP disclosures to beat earnings benchmarks
Isidro, H.
Pro forma earnings
Alternative earnings
Consensus
Profit
title_short The role of institutional and economic factors in the strategic use of non-GAAP disclosures to beat earnings benchmarks
title_full The role of institutional and economic factors in the strategic use of non-GAAP disclosures to beat earnings benchmarks
title_fullStr The role of institutional and economic factors in the strategic use of non-GAAP disclosures to beat earnings benchmarks
title_full_unstemmed The role of institutional and economic factors in the strategic use of non-GAAP disclosures to beat earnings benchmarks
title_sort The role of institutional and economic factors in the strategic use of non-GAAP disclosures to beat earnings benchmarks
author Isidro, H.
author_facet Isidro, H.
Marques, A.
author_role author
author2 Marques, A.
author2_role author
dc.contributor.author.fl_str_mv Isidro, H.
Marques, A.
dc.subject.por.fl_str_mv Pro forma earnings
Alternative earnings
Consensus
Profit
topic Pro forma earnings
Alternative earnings
Consensus
Profit
description We use hand-collected data for a sample of large European firms to investigate the influence of countries’ institutional and economic factors on managers’ non-generally accepted accounting principles (GAAP) disclosures. We find that managers are more likely to use non-GAAP measures to meet or beat earnings benchmarks that GAAP earnings would miss in countries with efficient law and enforcement, strong investor protection, developed financial markets, and good communication and dissemination of information. We also find that managers in countries with developed institutional and economic conditions are more likely to adjust non-GAAP earnings for recurring expenses such as R&D, depreciation, and stock-based compensation expenses. Our findings suggest that in environments in which there is more pressure to achieve earnings benchmarks and less opportunity to manipulate GAAP earnings, managers use more non-GAAP earnings disclosures to meet the benchmarks
publishDate 2015
dc.date.none.fl_str_mv 2015-05-12T11:20:25Z
2015-01-01T00:00:00Z
2015
2019-05-02T12:16:44Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv http://hdl.handle.net/10071/8912
url http://hdl.handle.net/10071/8912
dc.language.iso.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv 0963-8180
10.1080/09638180.2014.894928
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dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv Routledge/Taylor and Francis
publisher.none.fl_str_mv Routledge/Taylor and Francis
dc.source.none.fl_str_mv reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
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repository.name.fl_str_mv Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
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