Small cap financial reporting: Determinants of emphasis and placement of non-GAAP disclosures

Linda Campbell and Dennis M. López

Research in Accounting Regulation, 2010, vol. 22, issue 2, 114-120

Abstract: This study examines the determinants of emphasis on non-GAAP disclosures in the earnings announcements of small cap companies. Two proxies of non-GAAP information emphasis are investigated—placement of the first non-GAAP disclosure and placement of the non-GAAP to GAAP reconciliation required by Regulation G. Using hand-collected data from fourth quarter press releases, we find evidence indicating that small cap firms place a higher level of emphasis on non-GAAP financial measures when GAAP earnings suggest lower value-relevance and when their shares are owned by a higher proportion of institutional investors. We also find that small cap companies decrease the level of emphasis placed on non-GAAP information as their listing tenure increases.

Keywords: Earnings announcements; Non-GAAP disclosures; GAAP reconciliation; Regulation G (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reacre:v:22:y:2010:i:2:p:114-120

DOI: 10.1016/j.racreg.2010.07.006

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