Industry competition and non-GAAP disclosures

Isidro, Helena; Marques, Ana

doi:10.1080/00014788.2020.1798209

Cited by 13 publications

(16 citation statements)

References 78 publications

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“…2016 ). For example, in a recent study, Isidro and Marques ( 2021 ) examine the influence of industry-level product market competition using traditional measures of industry competition (concentration, price-cost margin and set up costs) on management’s NGFM disclosure decisions. They find that the intensity of industry competition affects the likelihood of NGFM and the extent of non-GAAP exclusions, but overall their findings suggest that industry competition has a positive impact on non-GAAP disclosure transparency.…”

Section: Results: Insights and Critiquementioning

confidence: 99%

Alternative Performance Measures: A Structured Literature Review of Research in Academic and Professional Journals

Herr

Lorson

Pilhofer

2022

Schmalenbach J Bus Res

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For more than two decades, the reporting of so-called ‘alternative performance measures’ (APMs) has been a common phenomenon in external financial reporting. APMs are voluntarily disclosed and generally unaudited performance measures. Typically, APMs modify earnings measures calculated in accordance with generally accepted accounting principles (GAAP) by (subjectively) adjusting certain earnings components. In the academic literature, with the information motive on the one hand and the motive of (adversarial) investor influence on the other hand, two alternative explanations for the voluntary reporting of alternative performance measures are discussed, which are difficult, if not impossible, for external stakeholders to disentangle. Taking into account the recent developments in more than 250 published articles in the last decade, this paper critically reviews a wide range of literature from the United States (U.S.), Europe and, to a less extent, Australia/Asia. In particular, we analyse a comprehensive sample of more than 400 research papers published in academic and professional journals as well as other publications which are important in the academic discourse. The purpose of this paper is to identify relevant research gaps that provide starting points for future research. For this purpose, our methodological approach strictly follows structured literature review (SLR) methodology in order to minimise researcher idiosyncrasies. Thus, our SLR facilitates a decided derivation of research gaps based on a reliable and valid analytical framework which has been deductively derived from previous research.

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Section: Results: Insights and Critiquementioning

confidence: 99%

Alternative Performance Measures: A Structured Literature Review of Research in Academic and Professional Journals

Herr

Lorson

Pilhofer

2022

Schmalenbach J Bus Res

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“…Firm characteristics, such as board composition (Frankel et al, 2011;Jennings and Marques, 2011), accounting expertise of audit committee members (Seetharaman et al, 2014), number of directorships the audit committee chair holds (Lee, 2021), and level of institutional ownership (Jennings and Marques, 2011), are effective in improving the quality of non-GAAP disclosures. External factors, such as analyst coverage (Christensen et al, 2021), media attention (Koning et al, 2010), and the level of competition within an industry (Isidro and Marques, 2021), similarly inhibit opportunism. Given some managers disclose non-GAAP earnings measures opportunistically and others informatively, market participants cannot rely on individual firms or managers to act altruistically.…”

Section: Improving Non-gaap Disclosuresmentioning

confidence: 99%

“…, 2021), media attention (Koning et al. , 2010), and the level of competition within an industry (Isidro and Marques, 2021), similarly inhibit opportunism. Given some managers disclose non-GAAP earnings measures opportunistically and others informatively, market participants cannot rely on individual firms or managers to act altruistically.…”

Section: Emerging Research Themesmentioning

confidence: 99%

Happy 20-year anniversary non-GAAP earnings: a systematic review of the literature

Brosnan,

Duncan,

Hasso

et al. 2023

JAL

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PurposeIt has been two decades since the first academic paper shone a spotlight on non-GAAP earnings. The past 20 years of research investigates concerns over the misuse of these disclosures and resulted in some significant changes to accounting and reporting standards across the globe. This paper aims to document the history of non-GAAP reporting and outline the emerging themes of the now matured practice of non-GAAP reporting.Design/methodology/approachThis systematic literature review searches two popular databases to identify the academic publications relating to non-GAAP reporting between 2002 and 2022. The paper uses bibliographic mapping to present the key statistics of the non-GAAP reporting field of research.FindingsThe non-GAAP reporting environment started out as the “wild West’ but, through regulation and public awareness, emerged as an important supplement to the traditional outputs of financial reporting. Current consensus is recent non-GAAP earnings are informative to users but there is lack of research into qualitative non-GAAP disclosures and the vast body of archival research needs triangulating with more experimental studies.Originality/valueThis paper contributes to the literature by documenting the past 20 years of non-GAAP reporting and identifying the important existing and emerging research areas concerning non-GAAP earnings disclosures.

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“…Then, we investigate how industry concentration affects owners' perceptions regarding political transparency. Industry competitors may use firm's PSD to make inferences about firm's political connections and spending which can weaken firm's political position (Isidro & Marques, 2020). However, severe competition may motivate firms to exhibit more PSD to reduce information asymmetry and secure additional capital (DeBoskey et al, 2020;Goh et al, 2020).…”

Section: Introductionmentioning

confidence: 99%

Ownership structure and political spending disclosure

2021

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This study examines the link between ownership structure and political spending disclosure (PSD). We break down ownership into four different groups of shareholders: institutional, insider, governmental and foreign. Using a unique dataset provided by CPA-Zicklin for PSD and a panel dataset from S&P 500 companies between 2015 and 2018, our results reveal that institutional and governmental ownership are positively associated with the level of PSD, while insider ownership is negatively associated with the level of PSD. Additionally, while prior literature mainly investigated how ownership structure influences disclosure practices, we analyse the mechanisms through which ownership characteristics influence PSD. Our cross-sectional tests provide evidence that insider owners exhibit more PSD if they are pursing tax-related lobbying expenses and tax avoidance practices. Additionally, governmental owners demand lower PSD in firms with higher nonfinancial and financial reporting quality. Finally, institutional owners demand more PSD in the case of lower industry concentration. Overall, we conclude that different owners have distinct impacts and preferences on a firm's political strategy and various mechanisms uniquely operationalise the interactions between different owners and political transparency. Through agency theory, our results advance heated debates on PSDan emerging, yet hitherto less examined, category of voluntary disclosure.

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Industry competition and non-GAAP disclosures

Cited by 13 publications

References 78 publications

Alternative Performance Measures: A Structured Literature Review of Research in Academic and Professional Journals

Alternative Performance Measures: A Structured Literature Review of Research in Academic and Professional Journals

Happy 20-year anniversary non-GAAP earnings: a systematic review of the literature

Ownership structure and political spending disclosure

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