Articlegreen2018

Disentangling Managers’ and Analysts’ Non‐GAAP Reporting

Jeremiah W. Bentley · Theodore E. Christensen · Kurt H. Gee · Benjamin C. Whipple

291 citations0/0 files storedJournal of Accounting Research

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Auditing, Earnings Management, Governance Accounting Theory and Financial Reporting Accounting and Organizational Management

Abstract

ABSTRACT Researchers frequently proxy for managers’ non‐GAAP disclosures using performance metrics available through analyst forecast data providers (FDPs), such as I/B/E/S. The extent to which FDP‐provided earnings are a valid proxy for managers’ non‐GAAP reporting, however, has been debated extensively. We explore this important question by creating the first large‐sample data set of managers’ non‐GAAP earnings disclosures, which we directly compare to I/B/E/S data. Although we find a substantial overlap between the two data sets, we also find that they differ in systematic ways because I/B/E/S (1) excludes managers’ lower quality non‐GAAP numbers and (2) sometimes provides higher quality non‐GAAP measures that managers do not explicitly disclose. Our results indicate that using I/B/E/S to identify managers’ non‐GAAP disclosures significantly underestimates the aggressiveness of their reporting choices. We encourage researchers interested in managers’ non‐GAAP reporting to use our newly available data set of manager‐disclosed non‐GAAP metrics because it more accurately captures managers’ reporting choices.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 291 citations exist upstream.

References

2005The economic implications of corporate financial reporting 2010The financial reporting environment: Review of the recent literature 2009Investor Inattention and Friday Earnings Announcements 2013Inside the 'Black Box' of Sell-Side Financial Analysts 2011Measuring Securities Litigation Risk 2002GAAP versus The Street: An Empirical Assessment of Two Alternative Definitions of Earnings 2003Assessing the relative informativeness and permanence of pro forma earnings and GAAP operating earnings 2003The Predictive Value of Expenses Excluded from Pro Forma Earnings

Cited by

2017Non-GAAP Reporting: Evidence from Academia and Current Practice 2018Analysts’ GAAP earnings forecasts and their implications for accounting research 2022Predicting Future Earnings Changes Using Machine Learning and Detailed Financial Data 2018Non‐GAAP Earnings Disclosure in Loss Firms 2021Non‐GAAP Earnings: A Consistency and Comparability Crisis?*2018

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.