Disentangling Managers’ and Analysts’ Non-GAAP Reporting

Jeremiah W. Bentley, Theodore E. Christensen, Kurt H. Gee, Benjamin C. Whipple

Research output: Contribution to journalArticlepeer-review

69 Scopus citations


Researchers frequently proxy for managers’ non-GAAP disclosures using performance metrics available through analyst forecast data providers (FDPs), such as I/B/E/S. The extent to which FDP-provided earnings are a valid proxy for managers’ non-GAAP reporting, however, has been debated extensively. We explore this important question by creating the first large-sample data set of managers’ non-GAAP earnings disclosures, which we directly compare to I/B/E/S data. Although we find a substantial overlap between the two data sets, we also find that they differ in systematic ways because I/B/E/S (1) excludes managers’ lower quality non-GAAP numbers and (2) sometimes provides higher quality non-GAAP measures that managers do not explicitly disclose. Our results indicate that using I/B/E/S to identify managers’ non-GAAP disclosures significantly underestimates the aggressiveness of their reporting choices. We encourage researchers interested in managers’ non-GAAP reporting to use our newly available data set of manager-disclosed non-GAAP metrics because it more accurately captures managers’ reporting choices.

Original languageEnglish (US)
Pages (from-to)1039-1081
Number of pages43
JournalJournal of Accounting Research
Issue number4
StatePublished - Sep 2018

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics


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