Securities and Exchange Commission Regulation and Non-GAAP Income Statements

• 成果类型: Article
• 署名作者: Gomez, Enrique A.; Heflin, Frank L.; Wang, Jasmine
• 署名单位: Pennsylvania Commonwealth System of Higher Education (PCSHE); Temple University; University System of Georgia; University of Georgia; University of Virginia
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2018-0719
• 发表日期: 2023
• 页码: 149-175
• 关键词: pro forma earnings; information asymmetry; CORPORATE DISCLOSURE; market liquidity; IMPACT; cost; forecasts; Managers; analysts; STREET

摘要

We study firms' decisions to provide non-GAAP income statements and the information environment consequences of Securities and Exchange Commission (SEC) comment letters directing them to stop disclosing such statements. We find firms voluntarily disclose non-GAAP income statements when firm and disclosure complexity, analyst following, and institutional ownership are higher. Using a difference-in-differences design, we find that, after firms stop disclosing full non-GAAP income statements at the direction of the SEC, the informativeness of non-GAAP earnings and overall earnings announcements decreases, information asymmetry increases, and analyst forecasts become less accurate and more disperse. We also find that firms not receiving a comment letter are more likely to stop providing non-GAAP income statements after an industry peer receives a non-GAAP income statement comment letter. Overall, our evidence suggests SEC comment letters about non-GAAP income statements appear to worsen the information environment for firms previously providing those statements.