Corporate Financial Disclosure: The Importance of GAAP Mandated Earnings Amidst Declining Value- Relevance

Abstract

The predilection of management, analyst, and investor alike towards non-GAAP earnings has queried the need for the regulation of corporate financial disclosure. Whilst non-GAAP earnings are increasingly value relevant, the need for regulation centres on the consistency, accountability, and impartiality required for investor decision-making. This paper reviews the literature surrounding value relevance and corporate financial disclosure, ultimately concluding that the regulation of corporate financial disclosure provides an important benchmark for non-GAAP earnings to be weighted against.