The effect of Regulation Fair Disclosure on expectations management: International evidence

The effect of DEFRA guidance on greenhouse gas disclosure

“…There is also evidence that the level of disclosure is moderated by corporate governance variables (board size, directors' share ownership, and ownership concentration) and company-specific characteristics (size, leverage, financial slack, and industry). Our results are also consistent with prior studies on the effect of government regulation or guidance (Canace et al, 2010;Heflin et al, 2012;Kalelkar & Nwaeze, 2011;Llena et al, 2007;Rankin et al, 2011;Sidaway & De Lange, 2011); in addition, although Mangena and Tauringana (2007) did not investigate the effect of DEFRA's guidance, they found disclosure evidence consistent with response to policy or regulation in general. Our results also fit with previous findings on board size (Cormier et al, 2011;Peters & Romi, 2012), NEDs (Brammer and Pavelin (2008)), ownership concentration (Brammer & Pavelin, 2008;Matolcsy, Shan, & Seethamraju, 2012), and managerial ownership (Gelb, 2000).…”

“…The guidelines proposed by the Canadian Institute of Chartered Accountants had a similar influence on the disclosure pattern of Canadian companies, as reported by Berthelot and Robert (2012). In other disclosure studies, similar evidence has been documented (see Canace, Caylor, Johnson, & Lopez, 2010;Heflin, Kross, & Suk, 2012).…”

The effect of Regulation FD on the properties of management earnings forecasts

“…As we note above, the ADR sample (337 observations) is significantly smaller than the US sample (11,543 observations) and so tests employing the ADR sample are of lower power. Further, Canace et al (2010) suggest that post-FD changes in expectations management are not significantly different between US and ADR firms. An alternative, and potentially larger, sample of firms not affected by FD, but subject to the same general economic forces as US firms, is Canadian firms.…”

“…5 Results regarding FD's impact on analysts' forecasts are mixed. Canace et al (2010) examine the effect of FD on expectations management, which is measured using analyst forecasts and actual earnings. They provide evidence that suggests FD reduced expectations management to meet or beat expectations for both US and ADR firms.…”

The Economics of Disclosure and Financial Reporting Regulation: Evidence and Suggestions for Future Research

“…[], Canace et al. []). Regarding (2), it should be noted that, while U.S. regulatory changes often become a role model for other countries, the adoption of similar regulation by a foreign jurisdiction takes time and hence would not likely be concurrent.…”