US CEO Political Ideology and Non‐GAAP Earnings

Adam Esplin, Yun Ke, Kari Joseph Olsen and Jiwoo Seo

Journal of Business Finance & Accounting, 2026, vol. 53, issue 4, 1437-1457

Abstract: We examine whether the disclosure and quality of non‐GAAP earnings are influenced by CEO political ideology in the United States. We find that Republican‐leaning CEOs are less likely to disclose non‐GAAP earnings than non‐Republican‐leaning CEOs. The lower likelihood of non‐GAAP disclosure from Republican‐leaning CEOs is mitigated in the presence of losses and transitory gains. The CEO political ideology is not associated with the magnitude of total or special items non‐GAAP exclusions. However, we find that politically conservative CEOs exclude fewer other expense items among firms that disclose non‐GAAP earnings. CEO political ideology does not significantly moderate the association between non‐GAAP exclusions and both future operating earnings and future operating cash flows. CEOs’ propensities to use non‐GAAP disclosure to meet or beat analysts’ street earnings expectations when GAAP earnings fall short of analysts’ GAAP earnings expectations are not moderated by political ideology. Our results shed light on the relation between non‐GAAP reporting practices and CEO political ideology.

Date: 2026
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