Correction to: The risk-relevance of non-GAAP earnings

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Non-GAAP Earnings for Contracting and Financial Disclosure

We explore how the internal use of non-GAAP performance metrics in compensation contracting relates to the disclosure of non-GAAP earnings to external stakeholders. Ex ante, it is unclear why information useful in contracting would be informative for valuation purposes unless a firm’s compensation and financial disclosure processes are related. We explore this relation using a large hand-collec...

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Regulation G requires all companies to quantitatively reconcile pro forma earnings with GAAP earnings. This paper provides three findings related to the impact of reconciliations on mispricing of pro forma earnings. First, prior to Reg G, we find that mis-pricing of pro forma earnings is limited to firms with low reconciliation quality. There is no evidence of mispricing for firms with high rec...

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ژورنال

عنوان ژورنال: Review of Accounting Studies

سال: 2023

ISSN: ['1380-6653', '1573-7136']

DOI: https://doi.org/10.1007/s11142-023-09758-9