The impact of the FMA guidelines of non-GAAP earnings disclosures

Rainsbury, Liz; Hart, Carol

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Date
2014-12-04
Citation:
Rainsbury, E., and Hart, C. (2014, December). The impact of the FMA guidelines of non-GAAP earnings disclosures. Paper presented at Auckland Region Accounting (ARA) Conference, Auckland, New Zealand.
Permanent link to Research Bank record:
https://hdl.handle.net/10652/3900
Abstract
This paper investigates whether disclosure guidelines issued by the New Zealand Financial Markets Authority changed the non-GAAP reporting policies of New Zealand companies. Financial markets authorities were concerned that company managers might use non-GAAP financial measures to mislead users. The New Zealand Financial Markets Authority responded in 2012 introducing guidelines that were to be applied from 2013. The guidelines (FMA 2012) were intended to reduce the potential non-GAAP information to be misleading by ensuring that they: (1) are not given undue prominence in investor communications, (2) are reconciled to the audited financial information, (3) are calculated consistently from period to period and is unbiased (FMA, 2012).
Keywords:
non-GAAP earnings, informativeness of earnings, strategic earning benchmarks, signalling and manipulation hypothesis, FMA 2012, Financial Markets Authority (FMA) of New Zealand
ANZSRC Field of Research:
1501 Accounting, Auditing and Accountability

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