Campus Units

Accounting

Document Type

Article

Publication Version

Accepted Manuscript

Publication Date

7-21-2010

Journal or Book Title

Advances in Accounting

Volume

30

Issue

1

First Page

43

Last Page

54

DOI

10.2139/ssrn.1646618

Abstract

This study extends prior research by examining the extent to which financial reporting knowledge and information viewing behavior affect the influence of reconciled non-GAAP, or “pro forma” earnings disclosures on nonprofessional investors’ judgments. We find that the effects of pro forma earnings information on participants’ judgments differ, depending on their level of financial reporting knowledge and the amount of time they spent viewing the earnings reconciliation relative to other earnings information. Our results suggest that the effectiveness of financial reporting regulation may be dependent on characteristics of the general investing public that vary across investors. Regulators and standard setters need to be aware of the possible differential effects of financial reporting knowledge and investor type as they consider non-GAAP earnings reporting requirements.

Comments

Dilla, William N. and Janvrin, Diane Joyce and Jeffrey, Cynthia, Pro Forma Accounting Reconciliation Disclosures: The Effect of Financial Reporting Knowledge and Information Viewing Behavior on Judgments of Nonprofessional Investors (July 21, 2010). Available at SSRN: https://ssrn.com/abstract=1646618 or http://dx.doi.org/10.2139/ssrn.1646618

Copyright Owner

Elsevier Ltd

Language

en

File Format

application/pdf

Published Version

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