Journal article
The details matter: SEC regulatory guidance and informativeness in non-GAAP disclosure decisions
H Desai, M Davern
Meditari Accountancy Research | Published : 2024
Abstract
Purpose: This paper aims to examine how managers make non-generally accepted accounting principles (GAAP) exclusion decisions depending on the regulatory guidance provided and their motivations. Guidance detail is a double-edged sword: resolving uncertainty but risking rule-based compliance over principled judgment. Design/methodology/approach: This paper uses the context of non-GAAP measures in reporting, given the history of Securities and Exchange Commission changes in guidance detail. Drawing on theories of epistemic motivation and process accountability, this paper manipulates the goal of management (informativeness vs. opportunism) and guidance detail to examine effects on management d..
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Funding Acknowledgements
The authors thank Ted Christensen, Robyn Maroney, Don Moser, Vernon Richardson, participants of the A-State Monthly Faculty Research Meeting [February 2022], ARCPA Arkansas Accounting Research Consortium [August 2021], Accounting Workshop for Experiments doctoral forums [June 2017, April 2018 and May 2019], students in the University of Melbourne's 2019 Behavioral Research in Accounting class and participants of the University of Melbourne's PhD seminars [July 2017 and March 2020] for their helpful comments. This research is supported by an Australian Government Research Training Program (RTP) Scholarship. The authors are also grateful to the Faculty of Business and Economics at the University of Melbourne for their financial support. This research project was approved by the Human Research Ethics Committee of The University of Melbourne.