Disclosure of GAAP line items in earnings announcements

• 成果类型: Article
• 署名作者: D'Souza, Julia; Ramesh, K.; Shen, Min
• 署名单位: Cornell University; Michigan State University; Michigan State University's Broad College of Business; George Mason University
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-009-9100-0
• 发表日期: 2010
• 页码: 179-219
• 关键词: pro forma; voluntary disclosure; VALUE-RELEVANCE; EMPIRICAL-EXAMINATION; CORPORATE DISCLOSURE; information-content; CONFERENCE CALLS; capital-markets; management; determinants

摘要

We provide new evidence on the disclosure in earnings announcements of financial statement line items prepared under Generally Accepted Accounting Principles (GAAP). First, we investigate the circumstances that might provide disincentives generally for GAAP line item disclosures. We find that managers who regularly intervene in the earnings reporting process limit disclosures at the aggregate level and in each of the financial statements so as to more effectively guide investor attention to summary financial information. Specifically, this disclosure behavior obtains when managers habitually cater to market expectations, engage in income smoothing, or use discretionary accruals to improve earnings informativeness. Second, we predict and find that the specific GAAP line items that firms choose to disclose are determined by the differential informational demands of their economic environment, consistent with incentives to facilitate investor valuation. However, these valuation-related disclosure incentives are muted when managers habitually intervene in the earnings reporting process.