 The effect of Regulation Fair Disclosure on expectations management: International evidenceThomas G. Canace, Marcus L. Caylor, Peter M. Johnson and Thomas J. Lopez Journal of Accounting and Public Policy, 2010, vol. 29, issue 5, 403-423 Abstract: We examine whether Regulation Fair Disclosure (Reg FD) was effective in limiting the expectations management of US firms as well as ADR and foreign-listed firms to meet or beat analysts' earnings forecasts. Domestic US firms are required to comply with Reg FD; however, ADR firms are explicitly exempted from its provisions. Thus, ADR firms are thought to represent a control against which US firm expectations management is measured. We find a decrease in expectations management for both US and ADR firms. We find that the post-Reg-FD changes for US and ADR firms are not significantly different. This suggests Reg FD was not effective in limiting forecast guidance or, alternatively, both US and ADR firms responded to Reg FD by reducing forecast guidance. We provide additional evidence that ADR firms experienced a significant decrease in expectations management relative to other foreign-listed firms suggesting that ADR firms voluntarily complied with Reg FD. Overall, our evidence suggests that Reg FD worked to reduce expectations management to meet or beat expectations for both US and ADR firms. Date: 2010 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jappol:v:29:y::i:5:p:403-423 Access Statistics for this article Journal of Accounting and Public Policy is currently edited by L. A. Gordon More articles in Journal of Accounting and Public Policy from Elsevier |
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