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Post-regulation G findings

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  • Campbell, Linda
  • Pitman, Marshall K.

Abstract

Researchers generally recognize that the stated goal of Regulation G (Reg. G), the Securities and Exchange Commission’s (SEC) conditions for use of non-Generally Accepted Accounting Principles (GAAP) financial measures, is to improve the quality and transparency of non-GAAP financial measures rather than to specifically affect various reporting trends of such measures. Various researchers continue to report substantial deceases in the number of non-GAAP disclosures and/or discloser firms since its implementation in early 2003. By using a sampling criteria in line with the SEC’s definition of non-GAAP financial measures and by reviewing actual corporate press releases, rather than relying on proxies (such as keyword searches), our results indicate that the proportion of companies releasing non-GAAP financial measures has decreased only moderately. We further examine recent changes in two areas of reporting trends noted in prior literature and conclude: (1) the most common pre-Reg. G categories of adjustments have changed and non-GAAP terminology remains as inconsistent as noted in pre-Reg. G research; and (2) the business services sector, which had previously been identified as a prominent non-GAAP discloser (reporting) sector is still an avid discloser of non-GAAP financial measures.

Suggested Citation

  • Campbell, Linda & Pitman, Marshall K., 2009. "Post-regulation G findings," Research in Accounting Regulation, Elsevier, vol. 21(2), pages 100-106.
    • Handle: RePEc:eee:reacre:v:21:y:2009:i:2:p:100-106
    DOI: 10.1016/j.racreg.2009.06.002
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    References listed on IDEAS

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    1. Bhattacharya, Nilabhra & Black, Ervin L. & Christensen, Theodore E. & Larson, Chad R., 2003. "Assessing the relative informativeness and permanence of pro forma earnings and GAAP operating earnings," Journal of Accounting and Economics, Elsevier, vol. 36(1-3), pages 285-319, December.
    2. Mark T. Bradshaw & Richard G. Sloan, 2002. "GAAP versus The Street: An Empirical Assessment of Two Alternative Definitions of Earnings," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 40(1), pages 41-66, March.
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    1. Campbell, Linda & López, Dennis M., 2010. "Small cap financial reporting: Determinants of emphasis and placement of non-GAAP disclosures," Research in Accounting Regulation, Elsevier, vol. 22(2), pages 114-120.
    2. Dilla, William N. & Janvrin, Diane J. & Jeffrey, Cynthia, 2014. "Pro forma accounting disclosures: The effect of reconciliations and financial reporting knowledge on nonprofessional investors' judgments," Advances in accounting, Elsevier, vol. 30(1), pages 43-54.

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