| Summary: | 碩士 === 元智大學 === 商學碩士班(財務金融學程) === 102 === This study investigates the relationship between firms which disclose non-GAAP earnings and CEOs selling behaviors. I hand-collect non-GAAP adjustment by S&;P 500 firms’ quarterly press release from 2006Q1 to 2008Q4. Based on the reconciliation table, I put those adjustments into 17 categories. There are three hypotheses. The contributions to this investigation are that (1) firms which disclose non-GAAP earnings from 2006 to 2008 are tend to transfer recurring items into nonrecurring items in order to adapt the new disclosure environment. It is consistent with Kolev et al. (2008); (2) CEOs and CFOs selling behavior do have effects on disclosing non-GAAP reporting. When CEO or CFO sell their shares after announcement, the likelihood of disclosing non-GAAP earnings will increase; (3) CEOs or CFOs who want to sell their shares after earnings announcement tend to exclude recurring items from GAAP earnings. However, the market participants are rational. Whether the stock price goes up or down, if firms disclose non-transitory adjustments, the future operating income will always be negative.
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