– The purpose of this paper is empirically investigate the pro forma disclosure behavior of US-listed foreign firms applying International Financial Reporting Standards (IFRS).
– The annual earnings press releases of US-listed foreign firms on the New York Stock Exchange are analyzed to compare the effect that reporting standard (specifically IFRS) has on pro forma disclosure frequency, disclosure characteristics and benchmarking.
– US-listed foreign firms applying IFRS report pro forma disclosures more frequently than firms using the USA’s generally accepted accounting principles (GAAP), but less opportunistically.
– This paper extends Epping and Wilder’s (2011) study and contributes to the pro forma disclosure literature by providing a cross-country analysis of non-GAAP disclosure based on reporting standard (IFRS or US GAAP). Understanding the non-GAAP disclosure of firms applying IFRS is useful to investors and regulators, as more countries adopt IFRS.
