Has the regulation of non-GAAP disclosures influenced managers' use of aggressive earnings exclusions?

The frequency of non-GAAP (“pro forma”) reporting has continued to increase in the U.S. over the last decade despite preliminary evidence that regulatory intervention led to a decline in non-GAAP disclosures. In particular, the Sarbanes-Oxley Act of 2002 (SOX) and Regulation G (2003) impose strict requirements related to the reporting of non-GAAP numbers. More recently, the SEC has renewed its emphasis on non-GAAP reporting and declared it a “fraud risk factor.” Given the SEC’s renewed emphasis on non-GAAP disclosures, we explore the extent to which regulation has curbed potentially misleading disclosures by investigating two measures of aggressive non-GAAP reporting. Consistent with the intent of Congress and the SEC, we find some evidence that managers report adjusted earnings metrics more cautiously in the post-SOX regulatory environment. Specifically, the results suggest that firms reporting non-GAAP earnings in the post-SOX period are less likely to (1) exclude recurring items incremental to those excluded by analysts and (2) use non-GAAP exclusions to meet strategic earnings targets on a non-GAAP basis that they miss based on I/B/E/S actual earnings. However, we also find that some firms exclude specific recurring items aggressively. Overall, the results suggest that while regulation has generally reduced aggressive non-GAAP reporting, some firms continue to disclose non-GAAP earnings numbers that could be misleading in the post-SOX regulatory environment

Ecological selection pressures for C4 photosynthesis in the grasses

Grasses using the C4 photosynthetic pathway dominate grasslands and savannahs of warm regions, and account for half of the species in this ecologically and economically important plant family. The C4 pathway increases the potential for high rates of photosynthesis, particularly at high irradiance, and raises water-use efficiency compared with the C3 type. It is therefore classically viewed as an adaptation to open, arid conditions. Here, we test this adaptive hypothesis using the comparative method, analysing habitat data for 117 genera of grasses, representing 15 C4 lineages. The evidence from our three complementary analyses is consistent with the hypothesis that evolutionary selection for C4 photosynthesis requires open environments, but we find an equal likelihood of C4 evolutionary origins in mesic, arid and saline habitats. However, once the pathway has arisen, evolutionary transitions into arid habitats occur at higher rates in C4 than C3 clades. Extant C4 genera therefore occupy a wider range of drier habitats than their C3 counterparts because the C4 pathway represents a pre-adaptation to arid conditions. Our analyses warn against evolutionary inferences based solely upon the high occurrence of extant C4 species in dry habitats, and provide a novel interpretation of this classic ecological association

Clinical Reasoning in Physical Therapy: A Concept Analysis

Background Physical Therapy, along with most health professions, struggles to describe clinical reasoning, despite it being a vital skill in effective patient care. This lack of a unified conceptualization of clinical reasoning leads to variable and inconsistent teaching, assessment, and research. Objective The objective was to conceptualize a broad description of physical therapists’ clinical reasoning grounded in the published literature and to unify our understanding for future work related to teaching, assessment, and research. Design/Methods The design included a systematic concept analysis using Rodgers’ Evolutionary methodology. A concept analysis is a research methodology in which a concept\u27s characteristics and the relationship between features of the concept is clarified. Results Based on findings in the literature, clinical reasoning in physical therapy was conceptualized as integrating cognitive, psychomotor, and affective skills. It is contextual in nature and involves both therapist and client perspectives. It is adaptive, iterative, and collaborative with the intended outcome being a biopsychosocial approach to patient/client management. Limitations Although a comprehensive approach was intended, it is possible that the search methods or reduction of the literature was incomplete or key sources were mistakenly excluded. Conclusions A description of clinical reasoning in physical therapy was conceptualized, as it currently exists in representative literature. The intent is for it to contribute to the unification of an understanding of how clinical reasoning has been conceptualized to date by practitioners, academicians, and clinical educators. Substantial work remains to be done to further develop the concept of clinical reasoning for physical therapy, including the role of movement in our reasoning in practice

Towards Secure and Legal E-Tendering

Tendering processes are considered to be a suitable mechanism for governments to fairly assign contracts for construction projects and procurement. The demand for efficiencies to be created in the process has resulted in a significant number of governments implementing e-tendering systems. E-tendering systems generally involve the submission of tender offer documents to a secure system hosted by the government (principal). An electronic environment presents obvious opportunities for collusion between principal and certain tenderers, fraud by tenderers and a minefield of legal uncertainties for fuelling protracted disputes. Critical examination of the security and legal requirements for e-tendering systems does not appear in the current literature. This paper identifies key security and legal issues to be addressed in the design of e-tendering systems, which may be included in e-procurement software, and proposes a new e-tendering architecture, using distributed trusted third parties which may be suitable for secure large scale operations such as the construction industry

Assessing the relative informativeness and permanence of pro forma earnings and GAAP operating earnings

This study investigates whether market participants perceive pro forma earnings to be more informative and more persistent than standard GAAP operating income by analyzing a sample of 1,149 actual pro forma press releases issued between January 1998 and December 2000. We find that pro forma announcers report frequent GAAP losses and are mostly concentrated in the service and high-tech industries. We document a significant difference between pro forma numbers reported by managers and earnings figures published by I/B/E/S, and conclude that it is problematic to use an income figure reported by I/B/E/S as a proxy for pro forma earnings. Our analyses of short-window abnormal returns and revisions in analysts\u27 one-quarter-ahead earnings forecasts indicate that pro forma earnings are more informative and more permanent than GAAP operating earnings. Our evidence suggests that market participants believe pro forma earnings are more representative of core earnings than GAAP operating income

'Redlands for Regions': Producer demonstration sites of psyllid-resistant leucaena across north Queensland

Leucaena, a tree legume with potential to greatly improve cattle performance, has not been readily adopted in northern Queensland primarily due to prevalence of the psyllid (Heteropsylla cubana) insect in higher rainfall zones. Psyllids reduce edible biomass in leaves by 40–52%, combined with a 46–83% reduction of stem yield (Bray and Woodroffe 1991). Losses to the Central Queensland beef industry due to psyllid impact on animal performance are estimated at $2 M per year (Mullen et al. 1998). Cultivar Redlands is a psyllid-resistant leucaena variety recently developed by Meat and Livestock Australia (MLA) and the University of Queensland

The politics of innovation: why innovations need a godfather

Innovation is closely linked to the development of technology. Hence it is often assumed that when an innovation fails it is the technology that is at fault. While this may be true in many instances, there are occasions when it is not the technology that is at fault, rather, it is managerial and organisational aspects that cause problems and lead to failure. Studies have shown that individuals who take on specific roles can play an important part in avoiding these problems. These roles include the technological gatekeeper, the product champion and the sponsor/coach. In addition to these roles, this paper argues that there is another, namely that of godfather. With this role a highly respected, senior figure within an organisation provides support that is critical in ensuring the project overcomes the hurdles that lie in the path of any major new development. The nature of the godfather role is explored through three case studies. These provide examples of the role and show how it can facilitate the innovation process

An appropriate tool for entrepreneurial learning in SMEs? The case of the 20Twenty Leadership Programme

The 20Twenty Leadership Programme was developed by Cardiff Metropolitan University as an executive education programme to be delivered within South Wales to small businesses. It is funded by the European Social Fund (ESF) and administered by the Welsh European Funding Office and has the key aim of developing SME’s growth potential via a range of leadership and management skills, including a focus on ‘soft’ skills. The focus of this paper is to place the 20Twenty Leadership Programme within the wider context of entrepreneurship policy and SME training initiatives in particular, and then to examine the rationale and delivery methods of the Programme in relation to these. It also reflects on the Programme’s success (or otherwise) to date where possible. Finally, the paper seeks to suggest fruitful areas of further research both in terms of the 20Twenty Leadership Programme itself, but also with regard to evaluation in relation to other parallel programmes, and to SME training initiatives more generally