Taxes in Non-GAAP Reporting: Evidence of Strategic Behavior in Selecting Tax Rates Applied to Exclusions

References

• Ayers B, Schwab C, Utke S (2015) Noncompliance with mandatory disclosure requirements: The magnitude and determinants of undisclosed permanently reinvested earnings. Accounting Rev. 90(1):59–93.Crossref, Google Scholar
• Barth M, Gow I, Taylor D (2012) Why do pro forma and street earnings not reflect changes in GAAP? Evidence from SFAS 123R. Rev. Accounting Stud. 17(3):526–562.Crossref, Google Scholar
• Bentley J, Christensen T, Gee K, Whipple B (2018) Disentangling managers’ and analysts’ non-GAAP reporting incentives. J. Accounting Res. 56(4):1039–1081.Crossref, Google Scholar
• Bhattacharya N, Black E, Christensen T, Larson C (2003) Assessing the relative informativeness and permanence of pro forma earnings and GAAP operating earnings. J. Accounting Econom. 36(1–3):285–319.Crossref, Google Scholar
• Black D, Christensen T (2009) US managers’ use of ‘pro forma’ adjustments to meet strategic earnings targets. J. Bus. Finance Accounting 36(3–4):297–326.Crossref, Google Scholar
• Black D, Black E, Christensen T, Gee K (2021a) Comparing non-GAAP EPS in earnings announcements and proxy statements. Management Sci. 68(2):1353–1377.Link, Google Scholar
• Black D, Christensen T, Ciesielski J, Whipple B (2018) Non-GAAP reporting: Evidence from academia and current practice. J. Bus. Finance Accounting 45(3–4):259–294.Crossref, Google Scholar
• Black D, Christensen T, Ciesielski J, Whipple B (2021b) Non-GAAP earnings: A consistency and comparability crisis? Contemporary Accounting Res. 38(3):1712–1747.Crossref, Google Scholar
• Black E, Christensen T, Joo T, Schmardebeck R (2017) The relation between earnings management and non-GAAP reporting. Contemporary Accounting Res. 34(2):750–782.Crossref, Google Scholar
• Black E, Christensen T, Kiosse P, Steffen T (2020) The influence of managers and rogue analysts in defining firm performance. Working paper, University of Oklahoma, Norman, Oklahoma.Google Scholar
• Bradshaw M, Sloan R (2002) GAAP versus the street: An empirical assessment of two alternative definitions of earnings. J. Accounting Res. 40(1):41–66.Crossref, Google Scholar
• Bradshaw M, Christensen T, Gee K, Whipple B (2018) Analysts’ GAAP earnings forecasts and their implications for accounting research. J. Accounting Econom. 66(1):46–66.Crossref, Google Scholar
• Bratten B, Gleason C, Larocque S, Mills L (2017) Forecasting taxes: New evidence from analysts. Accounting Rev. 92(3):1–29.Crossref, Google Scholar
• Brown N, Christensen T, Menini A, Steffen T (2020) Non-GAAP earnings disclosure and the valuation of IPOs. Working paper, University of Illinois at Urbana-Champaign, Illinois.Google Scholar
• Cassell C, Dreher L, Myers L (2013) Reviewing the SEC’s review process: 10-K comment letters and the cost of remediation. Accounting Rev. 88(6):1875–1908.Crossref, Google Scholar
• Cazier R, Rego S, Tian X, Wilson R (2015) The impact of increased disclosure requirements and the standardization of accounting practices on earnings management through the reserve for income taxes. Rev. Accounting Stud. 20(1):436–469.Crossref, Google Scholar
• Chen J, Gee K, Neilson J (2021a) Disclosure prominence and the quality of non-GAAP earnings. J. Accounting Res. 59(1):163–213.Crossref, Google Scholar
• Chen N, Chi S, Shevlin T (2021b) A tale of two forecasts: An analysis of mandatory and voluntary effective tax rate forecasts. Working paper, University of Houston, Texas.Google Scholar
• Chen N, Chiu P, Shevlin T (2018) Do analysts matter for corporate tax planning? Evidence from a natural experiment. Contemporary Accounting Res. 35(2):794–829.Crossref, Google Scholar
• Curtis A, McVay S, Whipple B (2014) The disclosure of non-GAAP earnings information in the presence of transitory gains. Accounting Rev. 89(3):933–958.Crossref, Google Scholar
• Deloitte (2020) A roadmap to non-GAAP financial measures and metrics. Accessed November 30, 2020, https://www2.deloitte.com/content/dam/Deloitte/us/Documents/audit/ASC/Roadmaps/us-aers-roadmap-to-non-gaap-financial-measures.pdf.Google Scholar
• Dhaliwal D, Gleason C, Mills L (2004) Last-chance earnings management: Using the tax expense to meet analysts’ forecasts. Contemporary Accounting Res. 21(2):431–459.Crossref, Google Scholar
• Donelson D, Koutney C, Mills L (2018) Nonrecurring income taxes. Working paper, University of Iowa, Iowa City, Iowa.Google Scholar
• Doyle J, Jennings J, Soliman M (2013) Do managers define non-GAAP earnings to meet or beat analyst forecasts? J. Accounting Econom. 56(1):40–56.Crossref, Google Scholar
• Doyle J, Lundholm R, Soliman M (2003) The predictive value of expenses excluded from pro forma earnings. Rev. Accounting Stud. 8(2–3):145–174.Crossref, Google Scholar
• Drake K, Hamilton R, Lusch S (2020) Are declining effective tax rates indicative of tax avoidance? Insight from effective tax rate reconciliations. J. Accounting Econom. 70(1):101317.Crossref, Google Scholar
• Easton P (2003) Discussion of “the predictive value of expenses excluded from pro forma earnings.” Rev. Accounting Stud. 8(2–3):175–183.Crossref, Google Scholar
• Frankel R, McVay S, Soliman M (2011) Non-GAAP earnings and board independence. Rev. Accounting Stud. 16(4):719–744.Crossref, Google Scholar
• Gleason C, Mills L (2008) Evidence of differing market responses to beating analysts’ targets through tax expense decreases. Rev. Accounting Stud. 13(2–3):295–318.Crossref, Google Scholar
• Graham J (1996) Proxies for the corporate marginal tax rate. J. Financial Econom. 42(2):187–221.Crossref, Google Scholar
• Graham J, Hanlon M, Shevlin T (2011) Real effects of accounting rules: Evidence from multinational firms’ investment location and profit repatriation decisions. J. Accounting Res. 49(1):137–185.Crossref, Google Scholar
• Graham J, Harvey C, Rajgopal S (2005) The economic implications of corporate financial reporting. J. Accounting Econom. 40(1–3):3–73.Crossref, Google Scholar
• Graham J, Raedy J, Shackelford D (2012) Research in accounting for income taxes. J. Accounting Econom. 53(1–2):412–434.Crossref, Google Scholar
• Gu Z, Chen T (2004) Analysts’ treatment of nonrecurring items in street earnings. J. Accounting Econom. 38:129–170.Crossref, Google Scholar
• Gupta S, Laux R, Lynch D (2015) Do firms use tax reserves to meet analysts’ forecasts? Evidence from the pre- and post-FIN 48 periods. Contemporary Accounting Res. 33(3):1044–1074.Crossref, Google Scholar
• Kolev K, Marquardt C, McVay S (2008) SEC scrutiny and the evolution of non‐GAAP reporting. Accounting Rev. 83(1):157–184.Crossref, Google Scholar
• Krull L (2004) Permanently reinvested foreign earnings, taxes, and earnings management. Accounting Rev. 79(3):745–767.Crossref, Google Scholar
• Leung E, Veenman D (2018) Non‐GAAP earnings disclosure in loss firms. J. Accounting Res. 56(4):1083–1137.Crossref, Google Scholar
• Lougee B, Marquardt C (2004) Earnings informativeness and strategic disclosure: An empirical examination of “pro forma” earnings. Accounting Rev. 79(3):769–795.Crossref, Google Scholar
• McNichols M (2003) Discussion of “why are earnings kinky? An examination of the earnings management explanation.” Rev. Accounting Stud. 8(2):385–391.Crossref, Google Scholar
• Robinson J, Xue Y, Yu Y (2011) Determinants of disclosure noncompliance and the effect of the SEC review: Evidence from the 2006 mandated compensation disclosure regulations. Accounting Rev. 86(4):1415–1444.Crossref, Google Scholar
• Schrand C, Wong F (2003) Earnings management using the valuation allowance for deferred tax assets under SFAS No. 109. Contemporary Accounting Res. 20(3):579–611.Crossref, Google Scholar
• Whipple B (2016) The great unknown: Why exclude ‘other’ items from non-GAAP earnings calculations in the post-reg G world? Working paper, University of Georgia, Athens, Georgia.Google Scholar