Non-GAAP earnings: International overview and suggestions for future research

This paper shows how non-generally accepted accounting principles (GAAP) earnings have been found to be more informative than GAAP earnings in several scenarios like countries where non-GAAP disclosures are compulsory and countries where these disclosures are voluntary but regulated

Do Harmonised Accounting Standards Lead to Harmonised

The objective of this paper is to investigate the level of harmonisation for IAS 39 Financial Instruments: Recognition and Measurement and to identify if different levels of harmonisation are associated with company-specific factors. Based on Rahman et al. (2002), we used the Jaccard (JACC) index to determine the level of harmonisation between IAS 39 and the financial reporting practice of a broad-based sample of European-listed companies in 2005.We applied regression analysis to identify companies’ specific characteristics that affect the level of convergence of the reporting practice of financial instruments. The results of this study show a high level of harmonisation between accounting practices of European companies included in our sample and IAS 39

The regulator's conundrum. How market reflexivity limits fundamental financial reform

Financial firms’ valuation approaches are key to financial market functioning. The financial crisis exposed fundamental faults in pre-crisis practices and the regulations that bolstered them. Critics pointed to reflexivity: financial markets have no solid anchor outside of market participants’ assessments, which makes them inherently unstable. Reflexivity implies valuation techniques are performative: they shape rather than reflect risks. Critics thus called for root and branch reform: regulators needed to regain control over these valuation practices. In spite of a flurry of changes, progress on the reforms has been limited in precisely those domains where it seemed most necessary. We argue that this lack of progress does not persist in spite of market reflexivity, but because of it. Public prescriptiveness might mandate widespread use of deficient valuation routines, exacerbating their deleterious performative effects and implicating public authorities in future financial crises. In the regulator's conundrum, neither a hands-off approach to valuation approaches, nor an interventionist stance promises to be effective. Empirically, we show how reflexivity has obstructed fundamental reforms in the European Union in three key domains: credit ratings, liquidity regulation, and accounting standards. Market reflexivity itself is, therefore, crucial to understanding the limited regulatory reforms we have witnessed since the crisis