20-F Filers and SEC Proposed Changes: Some Evidence of a US Home GAAP Preference

25 Pages Posted: 3 Oct 2007

See all articles by Marlene Plumlee

Marlene Plumlee

University of Utah - School of Accounting

David Plumlee

University of Utah - David Eccles School of Business

Date Written: September 2007

Abstract

This study uses trading volume measures to provide a richer understanding of US investors trading in 20-F filers and US market reactions to the reconciliation and disclosures included in 20-F filings. A unique aspect of this study is the inclusion of all 20-F filers, including foreign filers that report using US GAAP typically excluded from studies that examine the explanatory power of the reconciliations. Consistent with some prior research and expectations expressed by practitioners, we document no abnormal reaction to the 20-F filing for any foreign filers with or without the reconciliation. In addition, we document that the level of trading by US investors in foreign filers is higher when the firm elects to report using US GAAP instead of either IFRS or other available GAAPs. This increased level of trading is found during information events (earnings announcements and 20-F filings) and non-information trading periods. Our findings add to an understanding of US investors trading in foreign filers and may be of interest to regulators and firms as they move toward changes in the filing requirements.

Keywords: 20-F filer, reconciliation requirement, IFRS

JEL Classification: G12, G14, G18, G38, M41, M44, M47

Suggested Citation

Plumlee, Marlene A. and Plumlee, David, 20-F Filers and SEC Proposed Changes: Some Evidence of a US Home GAAP Preference (September 2007). Available at SSRN: https://ssrn.com/abstract=1018745 or http://dx.doi.org/10.2139/ssrn.1018745

Marlene A. Plumlee (Contact Author)

University of Utah - School of Accounting ( email )

1645 E Campus Center Dr
Salt Lake City, UT 84112-9303
United States

David Plumlee

University of Utah - David Eccles School of Business ( email )

1645 E Campus Center Dr
Salt Lake City, UT 84112-9303
United States

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