Please use this identifier to cite or link to this item:
https://hdl.handle.net/10356/98300
Title: | The valuation impact of reconciling pro forma earnings to GAAP earnings | Authors: | Zhang, Huai Zheng, Liu |
Keywords: | Business | Issue Date: | 2010 | Source: | Zhang, H., & Zheng, L. (2011). The valuation impact of reconciling pro forma earnings to GAAP earnings. Journal of Accounting and Economics, 51(1-2), 186-202. | Series/Report no.: | Journal of accounting and economics | Abstract: | 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 mispricing of pro forma earnings is limited to firms with low reconciliation quality. There is no evidence of mispricing for firms with high reconciliation quality. Second, we find no evidence of mispricing after Reg G. Third, there is a cross-Reg G reduction of mispricing for firms whose reconciliation quality improves, and there continues to be no mispricing for firms that have high reconciliation quality both before and after Reg G. Together, our results support the notion that better reconciliations reduce the extent of mispricing. | URI: | https://hdl.handle.net/10356/98300 http://hdl.handle.net/10220/18138 |
ISSN: | 0165-4101 | DOI: | 10.1016/j.jacceco.2010.07.001 | Schools: | Nanyang Business School | Rights: | © 2010 Elsevier B.V. This is the author created version of a work that has been peer reviewed and accepted for publication by Journal of Accounting and Economics, Elsevier B.V. It incorporates referee’s comments but changes resulting from the publishing process, such as copyediting, structural formatting, may not be reflected in this document. The published version is available at: [http://dx.doi.org/10.1016/j.jacceco.2010.07.001]. | Fulltext Permission: | open | Fulltext Availability: | With Fulltext |
Appears in Collections: | NBS Journal Articles |
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JAE submitted version.pdf | 196.57 kB | Adobe PDF | View/Open |
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