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NTU Management Review
Vol. 34 No. 2 Aug. 2024, 185-232
https://doi.org/10.6226/NTUMR.202408_34(2).0005

The Regulation of Non-GAAP Reporting and Earnings
Management: Evidence from the Recognition of Opportunistic
Special Items

非 GAAP 盈餘監管制度對盈餘管理的影響：以認列投機
性特別損益為例

Li-Han Chang, PricewaterhouseCoopers Taiwan
張立翰 / 資誠聯合會計師事務所
Han-Chung Chen, Department of Accountancy, National Taipei University
陳漢鐘 / 國立臺北大學會計學系
Kai-Wen Cheng, Department of Accounting, National Taiwan University
鄭凱文 / 國立臺灣大學會計學系
Chih-Hsien Liao, Department of Accounting, National Taiwan University
廖芝嫻 / 國立臺灣大學會計學系
Received 2022/8, Final revision received 2023/10
Abstract
This study investigates whether the change in the U.S. SEC’s regulation of non-GAAP
reporting in 2010 affects firms’ earnings management through the recognition of
opportunistic special items. The SEC released Compliance and Disclosure Interpretations
(hereafter C&DIs) in 2010 to relax the exclusion restrictions imposed by an earlier
regulation (i.e., Regulation G) and to give companies more flexibility in excluding other
items in the calculation of non-GAAP earnings. Using a difference-in-differences design,
we find that, relative to firms that do not report non-GAAP earnings, firms disclosing
non-GAAP earnings reduce the recognition of opportunistic special items after the
implementation of C&DIs. We also find that the incidence of using opportunistic special
items to meet or beat analysts’ earnings forecasts by non-GAAP firms significantly
decreases in the post-C&DIs period. Our results are robust to a variety of alternative
research design. An additional analysis suggests that the reduction in the recognition of
opportunistic special items is more pronounced in firms that report a loss under GAAP.
Our findings complement prior research suggesting that a less stringent regulation on non-
GAAP earnings disclosures will reduce firms’ incentives to pursue aggressive earnings
management.
【Keywords】non-GAAP reporting, recurring items, special items, earnings management,
compliance and disclosure interpretations

領域主編：王泰昌教授

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