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Publication Detailed Description
Journal Title
International Journal of Accounting
Year (definitive publication)
2013
Language
English
Country
United Kingdom
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Abstract
This study reports international evidence on the impact of compensation and board quality on the
voluntary disclosure of non-GAAP earnings numbers. We find that compensation contracts of board
directors that are linked to firm's market performance are associated with a higher probability of
disclosure of non-GAAP figures in the earnings announcements' press release. Furthermore, when
this type of compensation is used, firms tend to report non-GAAP figures in the title of the press
release, make more adjustments for recurring items, and avoid reporting reconciliations. These
reporting practices have been associated with opportunistic disclosure. We also show that an efficient
governance structure of the board of directors can help restrain most of these discretionary disclosure
decisions regarding non-GAAP reporting
Acknowledgements
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Keywords
Non-GAAP earnings; Compensation; Board of directors; Pro forma earnings
Fields of Science and Technology Classification
- Economics and Business - Social Sciences
Contributions to the Sustainable Development Goals of the United Nations
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