First Voluntary Disclosure: Is It Less Opportunistic?

Published in Asia-Pacific Journal of Accounting and Economics, 2015, Vol. 22, No. 4

32 Pages Posted: 27 Jan 2014 Last revised: 21 Jan 2016

Date Written: February 1, 2014

Abstract

The objective of voluntary disclosure regulation is to mitigate information asymmetry between the management and outside users. However, prior studies on voluntary disclosures provide mixed evidences on managers’ incentives. Using a setting of voluntary non-GAAP EPS reporting, this study attempts to examine whether the first non-GAAP EPS reporting is less dominated by opportunistic incentives. Consistent with the predictions of this research, it reveals that the duration to the first adjusted EPS disclosure is not more sensitive to negative transitory items and moreover, investors’ perception on the first non-GAAP EPS is more positive compared to subsequent ones. The less opportunistic behaviour on the first disclosure can be well explained by the management’s awareness of intensified monitoring by outside stakeholders.

Keywords: First voluntary disclosure, Opportunistic incentive, Transitory earnings, Non-GAAP EPS

JEL Classification: M41

Suggested Citation

Choi, Young-Soo, First Voluntary Disclosure: Is It Less Opportunistic? (February 1, 2014). Published in Asia-Pacific Journal of Accounting and Economics, 2015, Vol. 22, No. 4, Available at SSRN: https://ssrn.com/abstract=2385400 or http://dx.doi.org/10.2139/ssrn.2385400

Young-Soo Choi (Contact Author)

Sungkyunkwan University ( email )

School of Business
53 Myeongnyun-dong 3-ga, Jongno-gu
Seoul, 110-745
Korea
+8227600423 (Phone)
+8227600440 (Fax)

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