The effect of voluntary clawback adoption on non-GAAP reporting

• 成果类型: Article
• 署名作者: Kyung, Hangsoo; Lee, Hakyin; Marquardt, Carol
• 署名单位: Chinese University of Hong Kong; City University of New York (CUNY) System; Baruch College (CUNY)
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2018.09.002
• 发表日期: 2019
• 关键词: earnings management; pro forma; predictive-value; PROVISIONS; disclosure; real; COMPENSATION; INFORMATION; STREET; QUALITY

摘要

We examine the effect of voluntary adoption of clawback provisions on non-GAAP earnings disclosures. Prior literature documents that voluntary clawback adoption improves financial reporting quality by increasing the costs of misstating GAAP earnings. However, managers may respond to perceptions of reduced discretion over GAAP reporting by increasing their reliance on non-GAAP earnings disclosures. Using a propensity score matched sample, we find that non-GAAP earnings disclosure frequency increases and non-GAAP exclusion quality decreases after clawback adoption, consistent with a more opportunistic use of non-GAAP reporting. Additional cross-sectional tests help support this interpretation.