Small Cap Financial Reporting
Author | : Linda Campbell |
Publisher | : |
Total Pages | : |
Release | : 2017 |
ISBN-10 | : OCLC:1305392088 |
ISBN-13 | : |
Rating | : 4/5 (88 Downloads) |
Book excerpt: 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.