Do Managers Issue More Voluntary Disclosure When GAAP Limits Their Reporting Discretion in Financial Statements?

• 成果类型: Article
• 署名作者: Hribar, Paul; Mergenthaler, Richard; Roeschley, Aaron; Young, Spencer; Zhao, Chris X.
• 署名单位: University of Iowa; Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park; University of Kentucky; Arizona State University; Arizona State University-Tempe; Hong Kong Baptist University
• 刊物名称: JOURNAL OF ACCOUNTING RESEARCH
• ISSN/ISSBN: 0021-8456
• DOI: 10.1111/1475-679X.12401
• 发表日期: 2022
• 页码: 299-351
• 关键词: earnings guidance; predictive-value; INFORMATION; complexity; STANDARDS; language; returns

摘要

We examine whether managers provide more voluntary disclosure when GAAP limits their reporting discretion in financial statements. We find managers are more likely to disclose non-GAAP earnings, issue more management forecasts, and provide longer yet more readable management discussion and analysis (MD&A) disclosures when GAAP limits their discretion. These effects are stronger when there is greater demand for information and better monitoring. In contrast, these effects are weaker when managers have incentives to manage earnings. Difference-in-differences analyses around standard changes provide further evidence that managers make more non-GAAP adjustments and are more likely to discuss the standard and its underlying transaction in the MD&A when a new standard limits their discretion more than its predecessor. Collectively, our results suggest managers use voluntary disclosure channels to convey information when GAAP limits their ability to recognize such information in financial statements.