Impression management and Non-GAAP disclosure in earnings announcements

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Show simple item record Guillamon-Saorin, Encarna de Oliveira Isidro, Helena Marques, Ana 2022-07-15T08:13:27Z 2022-07-15T08:13:27Z 2017-04-01
dc.identifier.bibliographicCitation Guillamon-Saorin, E., Isidro, H., & Marques, A. (2017). Impression Management and Non-GAAP Disclosure in Earnings Announcements. Journal of Business Finance & Accounting, 44 (3-4), pp. 448-479 .
dc.identifier.issn 0306-686X
dc.description.abstract We study the market's reaction to the disclosure of non-GAAP earnings measures that are combined with high impression management. We construct an impression management score that captures several communication techniques that managers often use to positively bias investors’ perceptions of firm performance. We hand-collect and code both quantitative and qualitative information from earnings announcement press releases of large European firms. Our results indicate that non-GAAP measures are informative to capital markets. However, non-GAAP adjustments are more persistent when accompanied by higher levels of impression management. This evidence is consistent with managers attempting to distort users’ perceptions when non-GAAP adjustments are of lower quality. Market reaction tests suggest that investors are able to see through managers’ intentions and discount non-GAAP information that is accompanied by high impression management. Moreover, investors in more sophisticated markets penalize non-GAAP measures communicated with high impression management. Our results are robust to a battery of sensitivity tests, including the use of a machine-coded tone measure.
dc.description.sponsorship This study was supported by the Foundation for Science and Technology in Portugal (grant PTDC/EGE-GES/103770/2008). Encarna Guillamon- Saorin acknowledges financial contribution from the Spanish Ministry of Science and Innovation (SEJ2007- 67582-C02-02/ECON, ECO2010-19314), Ministerio de Economia y Competitividad (2014/00452/001) and Comunidad Autonoma de Madrid (SEJ2008-00059-003). Ana Marques also acknowledges financial support received from Nova Forum.
dc.language.iso eng
dc.publisher Wiley
dc.rights © 2017 John Wiley & Sons Ltd
dc.subject.other Pro forma earnings
dc.subject.other Alternative performance measures
dc.subject.other Street earnings
dc.subject.other Disclosure tone
dc.subject.other Emphasis
dc.subject.other Sophisticated investors
dc.subject.other Shareholder protection
dc.title Impression management and Non-GAAP disclosure in earnings announcements
dc.type article
dc.subject.eciencia Economía
dc.subject.eciencia Empresa
dc.rights.accessRights openAccess
dc.relation.projectID Gobierno de España. ECO2010-19314
dc.relation.projectID Gobierno de España. ECO2013-48328-C3-3-P
dc.relation.projectID Gobierno de España. SEJ2007-67582-C02-02
dc.relation.projectID Comunidad de Madrid. SEJ2008-00059-003
dc.type.version acceptedVersion
dc.identifier.publicationfirstpage 448
dc.identifier.publicationissue 3-4
dc.identifier.publicationlastpage 479
dc.identifier.publicationtitle Journal of Business Finance & Accounting
dc.identifier.publicationvolume 44
dc.identifier.uxxi AR/0000018494
dc.contributor.funder Ministerio de Economía y Competitividad (España)
dc.contributor.funder Ministerio de Ciencia e Innovación (España)
dc.contributor.funder Comunidad de Madrid
dc.affiliation.dpto UC3M. Departamento de Economía de la Empresa
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