Non‐generally accepted accounting principles disclosures and audit committee chairs’ external directorships

Lee, Cheng-Hsun

doi:10.1111/jbfa.12566

Cited by 4 publications

(8 citation statements)

References 49 publications

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“… 2014 ). For example, in a recent study, Lee ( 2021 ) finds evidence that companies where the chair of the independent audit committee holds more external directorships have stronger monitoring and thus provide higher quality NGFM disclosures.…”

Section: Results: Insights and Critiquementioning

confidence: 99%

“…Studies on this determinant seem to support the proposition that companies with weak corporate governance mechanisms (e.g., less board independence) are more likely to optimistically report APMs, suggesting that strong corporate governance protects investors from misleading APM disclosures (e.g., Jennings and Marques 2011;Seetharaman et al 2014). For example, in a recent study, Lee (2021) finds evidence that companies where the chair of the independent audit committee holds more external directorships have stronger monitoring and thus provide higher quality NGFM disclosures.…”

Section: (Ii) Motives For the Reporting Of Apmsmentioning

confidence: 96%

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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%

Section: (Ii) Motives For the Reporting Of Apmsmentioning

confidence: 96%

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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“…This creates an incentive for directors to protect the firm reputation and, thus, to protect their own as well (Fredriksson et al , 2020). High-status chairs face considerable risk of image and reputation damage if misreports or fraud occur (Lee, 2022). We expect high-status chairpersons to be particularly eager to preserve their reputational capital and to be regarded as effective monitors of management.…”

Section: Literature Review and Development Of Hypothesesmentioning

confidence: 99%

The desire of prestigious audit committee chairs: what are the benefits for financial reporting quality?

Broye

Johannes

2023

MAJ

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Purpose This study aims to examine how the prestige of audit committee (AC) chairpersons influences earnings management. Design/methodology/approach The sample contains 1,973 firm-year observations of French listed firms for the period 2007–2018. The authors examine the status of AC chairs and CEOs by focusing on the French business elite system. This study tests the association between AC chairs’ (relative) status and the level of earnings management using measures of accrual earnings management and real earnings management (REM). Findings The results of this study do not show that high-status AC chairs constrain accruals manipulation. However, the results provide evidence that they play a key role in constraining REM. High-status AC chairs are more likely to enhance the monitoring of this type of manipulation, given their thorough knowledge and understanding of the firm’s business environment and practices. This study also finds evidence that AC chairs with a status higher than CEOs are associated with lower levels of REM. The results suggest that prestigious AC chairs influence lower status CEOs’ strategic decisions. Originality/value This study demonstrates that high-status AC chairs play an important role in detecting and constraining deviations from normal business practices. The results have substantial implications for boards, which will benefit from an understanding of how the appointment of high-status chairs affects financial reporting quality.

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“…, 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.…”

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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Non‐generally accepted accounting principles disclosures and audit committee chairs’ external directorships

Cited by 4 publications

References 49 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

The desire of prestigious audit committee chairs: what are the benefits for financial reporting quality?

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

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