Footnote:
In: Review of Accounting Studies, Forthcoming
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments October 31, 2019 erstellt
Description:
We examine how exogenous changes in analyst coverage influence the likelihood that managers will voluntarily disclose customized (non-GAAP) performance metrics and the relative quality of their non-GAAP reporting. Specifically, we use a quasi-natural-experimental setting in which brokerage firms terminate analyst coverage and find that, following an unanticipated decrease in analyst coverage, managers are more likely to disclose non-GAAP performance metrics. We also find that managers become more aggressive in their disclosure choices and that the quality of their non-GAAP exclusions decreases after analysts terminate coverage. These effects are more pronounced among firms losing an analyst with greater ability and firms with weaker corporate governance. Overall, our evidence indicates that analysts play a monitoring role with respect to managers' non-GAAP disclosures and that managers become more aggressive in their non-GAAP reporting following an exogenous decline in analysts' influence