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Author : Christian Sofilkanitsch
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (119 download)
Download or read book Non-GAAP Reporting Around Financial Restatements written by Christian Sofilkanitsch and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Zoe-Vonna Palmrose
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Download or read book The Circumstances and Legal Consequences of Non-Gaap Reporting written by Zoe-Vonna Palmrose and published by . This book was released on 2003 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Our study examines the circumstances of non-GAAP financial reporting by 492 U.S. companies that announced restatements from 1995 to 1999. We analyze the occurrence and resolution of litigation over restatements; and, we explore the role of accounting items in bringing and resolving this litigation. To do so, we focus on the income statement. We provide evidence on the nature and pervasiveness of accounting misstatements and how, if at all, they affect litigation. We assess the nature of restatements by whether normal, recurring earnings from primary perations (core) or other components of earnings (non-core) are misstated and their pervasiveness by estimating the number of primary accounts misstated. In our sample, companies with core restatements have higher frequencies for intentional misstatements (fraud) and subsequent bankruptcy or delisting. They likewise have, on average, more material misstatements, more negative security price reactions to restatement announcements, and more negative security price changes over the six months preceding and following restatement announcements. However, controlling for these and other factors, we find a significant association between accounting items and litigation, whether occurrences or resolutions. Specifically, core restatements - driven primarily by revenue misstatements, a component of core earnings - and more pervasive restatements each play a role, while misstatements of non-core earnings alone do not.
Author : Shin-Rong Shiah-Hou
Publisher :
ISBN 13 :
Total Pages : 29 pages
Book Rating : 4.:/5 (13 download)
Download or read book Non-GAAP Reporting and Accounting Restatement written by Shin-Rong Shiah-Hou and published by . This book was released on 2018 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this study, I examine whether disclosing Non-GAAP earnings is a signal of experiencing accounting restatement. I propose a scenario in which earnings are managed within the constraints of GAAP guidelines, as long as there is sufficient leeway to permit income-increasing accounting choices. Managers usually avoid issuing Non-GAAP earnings because of severe penalties. If this becomes no longer possible within GAAP earning management, managers have incentives to cross the line into Non-GAAP territory. At this point, disclosing Non-GAAP earnings is positively associated with accounting restatement because of the great magnitude of earnings management. I find that firms with restatements experience a significant increase in the relative use of disclosing Non-GAAP earnings with positive other exclusions. Firms with the positive other exclusions excluded from Non-GAAP earnings may exhibit increased likelihood of fraud or core-earnings restatement. Finally, firms disclosing Non-GAAP earnings and having high accounting complexity are more likely to restate than those disclosing Non-GAAP earnings and having low accounting complexity.
Author : Nicola Moscariello
Publisher :
ISBN 13 : 9781527570160
Total Pages : pages
Book Rating : 4.5/5 (71 download)
Download or read book Reporting Non-GAAP Financial Measures written by Nicola Moscariello and published by . This book was released on 2021-08 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The use of alternative performance indicators (APMs) (also known as 'Non-GAAP' earnings) is a widespread phenomenon, and the increased reliance on APMs has recently triggered a strong debate among regulators, managers and investors on the nature of these 'tailored' earnings and on the economic reasons behind them. On one hand, APMs might reflect managers' attempt to offer useful information to predict companies' future sustainable cash-flows and earnings (information hypothesis), while, on the other, the non-standardized nature of these metrics impacts on the comparability of the financial results, and reduces the reliability and the faithful representation of financial information (opportunistic hypothesis). By collecting several theoretical and empirical contributions on APMs, this book provides a number of interesting and useful insights on the economics of APMs and their impact on financial markets.
Author : Martin S. Fridson
Publisher : John Wiley & Sons
ISBN 13 : 1118064208
Total Pages : 405 pages
Book Rating : 4.1/5 (18 download)
Download or read book Financial Statement Analysis written by Martin S. Fridson and published by John Wiley & Sons. This book was released on 2011-06-01 with total page 405 pages. Available in PDF, EPUB and Kindle. Book excerpt: The updated, real-world guide to interpreting and unpacking GAAP and non-GAAP financial statements In Financial Statement Analysis, 5th Edition, leading investment authority Martin Fridson returns with Fernando Alvarez to provide the analytical framework you need to scrutinize financial statements, whether you’re evaluating a company’s stock price or determining valuations for a merger or acquisition. Rather than taking financial statements at face value, you’ll learn practical and straightforward analytical techniques for uncovering the reality behind the numbers. This fully revised and up-to-date 5th Edition offers fresh information that will help you to evaluate financial statements in today’s volatile markets and uncertain economy. The declining connection between GAAP earnings and stock prices has introduced a need to discriminate between instructive and misleading non-GAAP alternatives. This book integrates the alternatives and provides guidance on understanding the extent to which non-GAAP reports, particularly from US companies, may be biased. Understanding financial statements is an essential skill for business professionals and investors. Most books on the subject proceed from the questionable premise that companies' objective is to present a true picture of their financial condition. A safer assumption is that they seek to minimize the cost of raising capital by portraying themselves in the most favorable light possible. Financial Statement Analysis teaches readers the tricks that companies use to mislead, so readers can more clearly interpret statements. Learn how to read and understand financial statements prepared according to GAAP and non-GAAP standards Compare CFROI, EVA, Valens, and other non-GAAP methodologies to determine how accurate companies’ reports are Improve your business decision making, stock valuations, or merger and acquisition strategy Develop the essential skill of quickly and accurately gathering and assessing information from financial statements of all types Professional analysts, investors, and students will gain valuable knowledge from this updated edition of the popular guide. Filled with real-life examples and expert advice, Financial Statement Analysis, 5th Edition, will help you interpret and unpack financial statements.
Author : H. David Sherman
Publisher :
ISBN 13 :
Total Pages : 7 pages
Book Rating : 4.:/5 (11 download)
Download or read book The Pitfalls of Non-GAAP Metrics written by H. David Sherman and published by . This book was released on 2017 with total page 7 pages. Available in PDF, EPUB and Kindle. Book excerpt: For decades, companies have used custom metrics that don't conform to generally accepted accounting principles (GAAP) or international financial reporting standards (IFRS) as supplements to their official financial statements. Some common non-GAAP measures include adjusted earnings before interest, taxes, depreciation, and amortization (known as adjusted EBITDA), free cash flow, funds from operations, adjusted revenues, adjusted earnings, adjusted earnings per share, and net debt. However, as the authors point out, it's not unusual for these alternative measures to lead to problems. Since companies devise their own methods of calculation, it's difficult to compare the metrics from company to company - or, in many cases, from year to year within the same company. According to the authors, alternative measures, once used fairly sparingly and shared mostly with a small group of professional investors, have become more ubiquitous and further and further disconnected from reality. In 2013, McKinsey and Company found that all of the 25 largest U.S.-based nonfinancial companies reported some form of non-GAAP earnings. Press releases and earnings-call summaries often present non-GAAP measures that are increasingly detached from their GAAP-based equivalents. In addition to creating potential problems for investors, the authors argue, alternative metrics can harm companies themselves by obscuring their financial health, overstating their growth prospects beyond what standard GAAP measures would support, and rewarding executives beyond what is justified. Board members, top executives, compliance officers, and corporate strategists need to make sure that whatever alternative measures companies use improve transparency and reduce bias in financial reports. Although no standard is perfect, the authors note that GAAP and IFRS standards provide a foundation for consistent measurement of corporate performance over time and across businesses.
Author : Orice Williams
Publisher : DIANE Publishing
ISBN 13 : 1422309177
Total Pages : 211 pages
Book Rating : 4.4/5 (223 download)
Download or read book Financial Restatements written by Orice Williams and published by DIANE Publishing. This book was released on 2007-12 with total page 211 pages. Available in PDF, EPUB and Kindle. Book excerpt: In 2002, it was reported that the number of restatement announcements due to financial reporting fraud &/or accounting errors grew significantly between Jan. 1997 & June 2002, negatively impacting the restating companies¿ market capitalization by billions of dollars. The author was asked to update key aspects of the 2002 report. This report discusses: (1) the number of, reasons for, & other trends in restatements; (2) the impact of restatement announcements on the restating companies¿ stock costs & what is known about investors¿ confidence in U.S. capital markets; & (3) regulatory enforcement actions involving accounting- & audit-related issues. Includes recommendations. Charts & tables.
Author : Maef Woods
Publisher :
ISBN 13 :
Total Pages : 90 pages
Book Rating : 4.:/5 (497 download)
Download or read book The Valuation and Contracting Roles of Restated Earnings written by Maef Woods and published by . This book was released on 2009 with total page 90 pages. Available in PDF, EPUB and Kindle. Book excerpt: Between January 1, 2002, and September 30, 2005, 1,084 public companies restated previously issued financial statements. This represents 16 percent of the average number of listed companies, as compared to almost 8 percent of listed companies that made restatements between 1997 and 2001 (GAO 2006b, 4). Because they involve correcting financial statements previously filed with the U.S. Securities and Exchange Commission (SEC), restatements may reflect abuse of the flexibility that exists within generally accepted accounting principles (GAAP) and thus have "raised questions about the credibility of accounting practices and the quality of corporate financial disclosure and oversight in the United States" (GAO 2002, 1). Not surprisingly, academic research on restatements has grown in recent years. However, most attention has been focused on effects relative to restatement announcements. In contrast, this study examines the timeframe during which the errors or misapplication of GAAP originally occurred. Specifically, this study explores the relationship between earnings and returns and that between earnings and chief executive officers' (CEOs') cash compensation over the period for which earnings were initially misstated. Using data hand-collected from the original and amended documents filed with the U.S. Securities and Exchange Commission (SEC), after some minor adjustments such as excluding restatements related to purchased in-process research and development, no difference is found in the strength of the association between returns and earnings as originally reported versus as restated. However, decomposing the originally reported earnings into the restated (GAAP-compliant) component and restatement/error (GAAP-non-compliant) component suggests that market participants find both components to be value relevant when profits are originally reported but only the restated (GAAP-compliant) component to be value relevant when losses are originally reported. Similar results are found when analyzing the relation between earnings and CEOs' cash compensation. When firms initially report profits, both the GAAP-compliant and GAAP-non-compliant components are positively associated with CEOs' cash compensation. Although other explanations are possible, this result is consistent with the market "tolerating" misstatements by profitable firms. Another possible explanation points towards the contracting role of accounting earnings and shareholders' implicit sanction for deviation from GAAP. When firms initially report losses, the GAAP-compliant component is negatively associated with CEOs' cash compensation and the GAAP-non-compliant component is not significant. This suggests that the GAAP-non-compliant component does not play a role in contracting when losses are initially reported. Whether the market tolerates some misstatements from profit-making firms, or efficient contracting requires such deviations, are subjects of future research.
Author :
Publisher : DIANE Publishing
ISBN 13 : 1428944737
Total Pages : 272 pages
Book Rating : 4.4/5 (289 download)
Download or read book Financial statement restatements trends, market impacts, regulatory responses, and remaining challenges. written by and published by DIANE Publishing. This book was released on with total page 272 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Thomas A. King
Publisher : John Wiley & Sons
ISBN 13 : 1118044614
Total Pages : 260 pages
Book Rating : 4.1/5 (18 download)
Download or read book More Than a Numbers Game written by Thomas A. King and published by John Wiley & Sons. This book was released on 2011-02-17 with total page 260 pages. Available in PDF, EPUB and Kindle. Book excerpt: The world certainly suffers no shortage of accounting texts. The many out there help readers prepare, audit, interpret and explain corporate financial statements. What has been missing is a book offering context and discussion for divisive issues such as taxes, debt, options, and earnings volatility. King addresses the why of accounting instead of the how, providing practitioners and students with a highly readable history of U.S. corporate accounting. More Than a Numbers Game: A Brief History of Accounting was inspired by Arthur Levitt's landmark 1998 speech delivered at New York University. The Securities and Exchange Commission chairman described the too-little challenged custom of earnings management and presaged the breakdown in the US corporate accounting three years later. Somehow, over a one-hundred year period, accounting morphed from a tool used by American railroad managers to communicate with absent British investors into an enabler of corporate fraud. How this happened makes for a good business story. This book is not another description of accounting scandals. Instead it offers a history of ideas. Each chapter covers a controversial topic that emerged over the past century. Historical background and discussion of people involved give relevance to concepts discussed. The author shows how economics, finance, law and business customs contributed to accounting's development. Ideas presented come from a career spent working with accounting information.
Author : Baruch Lev
Publisher : John Wiley & Sons
ISBN 13 : 1119191084
Total Pages : 268 pages
Book Rating : 4.1/5 (191 download)
Download or read book The End of Accounting and the Path Forward for Investors and Managers written by Baruch Lev and published by John Wiley & Sons. This book was released on 2016-06-14 with total page 268 pages. Available in PDF, EPUB and Kindle. Book excerpt: An innovative new valuation framework with truly useful economic indicators The End of Accounting and the Path Forward for Investors and Managers shows how the ubiquitous financial reports have become useless in capital market decisions and lays out an actionable alternative. Based on a comprehensive, large-sample empirical analysis, this book reports financial documents' continuous deterioration in relevance to investors' decisions. An enlightening discussion details the reasons why accounting is losing relevance in today's market, backed by numerous examples with real-world impact. Beyond simply identifying the problem, this report offers a solution—the Value Creation Report—and demonstrates its utility in key industries. New indicators focus on strategy and execution to identify and evaluate a company's true value-creating resources for a more up-to-date approach to critical investment decision-making. While entire industries have come to rely on financial reports for vital information, these documents are flawed and insufficient when it comes to the way investors and lenders work in the current economic climate. This book demonstrates an alternative, giving you a new framework for more informed decision making. Discover a new, comprehensive system of economic indicators Focus on strategic, value-creating resources in company valuation Learn how traditional financial documents are quickly losing their utility Find a path forward with actionable, up-to-date information Major corporate decisions, such as restructuring and M&A, are predicated on financial indicators of profitability and asset/liabilities values. These documents move mountains, so what happens if they're based on faulty indicators that fail to show the true value of the company? The End of Accounting and the Path Forward for Investors and Managers shows you the reality and offers a new blueprint for more accurate valuation.
Author : U S Government Accountability Office (G
Publisher : BiblioGov
ISBN 13 : 9781289167622
Total Pages : 220 pages
Book Rating : 4.1/5 (676 download)
Download or read book Financial Restatements written by U S Government Accountability Office (G and published by BiblioGov. This book was released on 2013-07 with total page 220 pages. Available in PDF, EPUB and Kindle. Book excerpt: The U.S. Government Accountability Office (GAO) is an independent agency that works for Congress. The GAO watches over Congress, and investigates how the federal government spends taxpayers dollars. The Comptroller General of the United States is the leader of the GAO, and is appointed to a 15-year term by the U.S. President. The GAO wants to support Congress, while at the same time doing right by the citizens of the United States. They audit, investigate, perform analyses, issue legal decisions and report anything that the government is doing. This is one of their reports.
Author : James Thompson
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Download or read book An Analysis of Restatements on Financial Reporting written by James Thompson and published by . This book was released on 2004 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Public confidence in financial statements may be at an all-time low. The bankruptcy of Enron, the largest bankruptcy in United States history, brings into question whether the accounting profession, and the auditing process in particular, protects the users of financial statements. The shower of scandals and earnings restatements makes users skeptical of the financial reporting rules that are supposed to protect the public. In addition, a lack of transparency in reporting followed by restated financial restatements disclosing billions of dollars of omitted liabilities and losses exacerbate this problem. This paper considers the frequency and nature of Form 8-K reports that are filed with the Securities and Exchange Commission (SEC) by Fortune 500 companies during 2001. This form is used to report the occurrence of any material events or corporate changes which are of importance to investors or security holders and previously have not been reported by the registrant. Information from Form 8-K is analyzed to identify which companies filed 8-K reports, the types of disclosures that are included, industry characteristics of companies that file 8-K reports, whether financial statements were restated as a result of those filings, the reasons that restatements, if any, were required, and the relationship between size of company and number of restatements.
Author : Yufei Wang
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (135 download)
Download or read book PCAOB Inspection of Audit Firms and Client Financial Statement Restatements written by Yufei Wang and published by . This book was released on 2021 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines whether auditors' deficiencies identified in the Public Company Accounting Oversight Board (PCAOB) inspection reports are representative of the auditors' deficiencies and indicative of misstatements in their clients' financial reports. Using manually collected data from 2002 to 2016, I examine whether the deficiencies captured in the PCAOB inspection reports relate to the audited companies' accounting misstatements in the restatements. I test two accounting areas-revenue and goodwill-which are either the largest cause of restatements (revenue) or are more likely to have disagreements between auditors and the PCAOB's inspectors (goodwill) in terms of the nature of the accounts. The results show that clients of auditors that receive revenue-related deficiencies in the PCAOB inspection reports are likely to restate revenue-related accounting issues, whereas there is no such association between goodwill-related deficiencies and goodwill-related restatements. Furthermore, I filter out the auditors' clients based on their exposure to audit deficiencies and find that clients with higher exposure to revenue- and goodwill-related deficiencies are more likely to restate revenue- and goodwill-related accounting issues, respectively. Additionally, goodwill-related audit deficiencies that are departures from GAAP are more likely to be associated with goodwill-related restatements than non-GAAP goodwill deficiencies, whereas revenue-related deficiencies do not differ between GAAP and non-GAAP deficiencies. The findings show that the relationships between audit deficiencies and restatements vary among different accounting areas, and these relationships are affected by the severity of the deficiency and the client's exposure to the deficiency.
Author : Shu-Hui Sue
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (13 download)
Download or read book Exploring the Causes of Accounting Restatements by Family Firms written by Shu-Hui Sue and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Prior research shows that family firms have better earnings quality than non-family firms in common-law countries and highly developed markets. In contrast, we do not find a significant difference in the financial reporting quality between family and non-family firms in the context of a civil-law system and less developed market. We show that the financial reporting quality of family firms is conditioned on (1) the divergence between the controlling shareholders' voting rights and their cash flow rights, and (2) the firm's reputation for integrity, while these two conditions do not explain the restatement likelihood for non-family firms. Moreover, when accounting irregularities are detected in the case of family firms, they are associated with more serious accounting restatements. Together, these results imply that the severity of the conflict between ultimate and minority shareholders, and a lack of integrity, explain the propensity for making financial restatements among family firms in a regime characterized as having weak investor protection and concentrated ownership structures.
Author : Jill Gilbert Welytok
Publisher : John Wiley & Sons
ISBN 13 : 1118052196
Total Pages : 384 pages
Book Rating : 4.1/5 (18 download)
Download or read book Sarbanes-Oxley For Dummies written by Jill Gilbert Welytok and published by John Wiley & Sons. This book was released on 2011-02-08 with total page 384 pages. Available in PDF, EPUB and Kindle. Book excerpt: You may not believe that there’s a fun and easy way to comply with Sarbanes –Oxley, but once you have Sarbanes-Oxley For Dummies, Second Edition in front of you, you’re sure to change your mind. This friendly guide gets you quickly up to speed with the latest SOX legislation and shows you safe and effective ways to reduce compliance costs. In plain English, this completely reliable handbook walks you through the new and revised SOX laws, introduces compliance strategies for changed and unchanged guidelines, and gives you an effective framework for implementation You’ll find out how to create an efficient audit committee, purchase and use SOX software solutions, and make practical, cost-effective decisions in your initial compliance year and beyond. You’ll also find proven strategies for staying public or going private and learn how to deal with all those SOX forms. Discover how to: Establish SOX standards for IT professionals Minimize compliance costs in every area of your company Survive a section 404 audit Avoid litigation under SOX Anticipate future rules and trends Create a post-SOX paper trail Bolster your company’s standing and reputation Work with SOX in a small business Meet new SOX standards Build a board that can’t be bought Comply with all SOX management mandates Complete with invaluable tips on how to form an effective audit committee, Sarbanes-Oxley For Dummies is the resource you need to keep your SOX clean.
Author : Charles W. Mulford
Publisher : John Wiley & Sons
ISBN 13 : 0471469181
Total Pages : 438 pages
Book Rating : 4.4/5 (714 download)
Download or read book Creative Cash Flow Reporting written by Charles W. Mulford and published by John Wiley & Sons. This book was released on 2005-01-20 with total page 438 pages. Available in PDF, EPUB and Kindle. Book excerpt: Successful methodology for identifying earnings-related reporting indiscretions Creative Cash Flow Reporting and Analysis capitalizes on current concerns with misleading financial reporting on misleading financial reporting. It identifies the common steps used to yield misleading cash flow amounts, demonstrates how to adjust the cash flow statement for more effective analysis, and how to use adjusted operating cash flow to uncover earnings that have been misreported using aggressive or fraudulent accounting practices. Charles W. Mulford, PhD, CPA (Atlanta, GA), is the coauthor of three books, including the bestselling The Financial Numbers Game: Identifying Creative Accounting Practices. Eugene E. Comiskey, PhD, CPA, CMA (Atlanta, GA), is the coauthor of the bestselling The Financial Numbers Game: Identifying Creative Accounting Practices.
