Helena Isidro - Academia.edu (original) (raw)

Papers by Helena Isidro

Research paper thumbnail of Dirty surplus accounting flows: international evidence

Http Dx Doi Org 10 1080 00014788 2004 9729979, Feb 28, 2012

Page 1. Dirty Surplus Accounting Flows: International Evidence Helena Isidro†, John O'Ha... more Page 1. Dirty Surplus Accounting Flows: International Evidence Helena Isidro†, John O'Hanlon‡ and Steven Young‡ ... SFRH/BD/6021/2001) and the Centre for Business Performance at the Institute of Chartered Accountants in England and Wales (Contract 5-414). Page 2. ...

Research paper thumbnail of Analysis of Institutional Investors’ Reaction to the Issuance of SEC's Comment Letters to European IFRS Registrants Versus US GAAP Registrants

Research paper thumbnail of Disclosure of Intellectual Capital in Portugal in the First Decade of the Twenty-First Century

Tourism Management Studies, Apr 12, 2013

Este estudo tem como objectivo o estudo da divulgação voluntária de capital intelectual nos relat... more Este estudo tem como objectivo o estudo da divulgação voluntária de capital intelectual nos relatórios anuais de 32 empresas cotadas na Euronext Lisbon, ininterruptamente de 2001 a 2009. Este estudo difere dos estudos anteriores uma vez que procura analisar a evolução, ao longo dos anos, da divulgação do capital intelectual em Portugal. Os resultados deste estudo indicam que os níveis de divulgação de capital intelectual são muito reduzidos não tendo sido registado um aumento, estatisticamente significativo, no nível de divulgação. Os resultados ainda indicam que em 2001 a categoria de capital intelectual com maior divulgação foi a do capital externo, enquanto nos anos de 2003 e 2005 a categoria com maior nível de divulgação foi a categoria do capital interno. Nos anos de 2007 e 2009 as categorias de capital externo e capital interno apresentam proporções de divulgação muito semelhantes. A categoria do capital humano é a categoria com menor nível de divulgação.

Research paper thumbnail of The Role of Institutional and Economic Forces in the Strategic Use of Non-GAAP Disclosures to Beat Earnings Benchmarks

SSRN Electronic Journal, 2000

... non-GAAP disclosures to beat earnings benchmarks Helena Isidro Instituto Universitário de Lis... more ... non-GAAP disclosures to beat earnings benchmarks Helena Isidro Instituto Universitário de Lisboa (ISCTE-IUL), BRU UNIDE, Lisboa, Portugal ... disclosure choices has been mostly tested in the context of mandatory financial information (Webb et al., 2008; Hope, 2003a). ...

Research paper thumbnail of The Effects of Managers’ Compensation and Board Quality on Non-GAAP Reporting Decisions

SSRN Electronic Journal, 2000

This study reports international evidence of the impact of managers' compensation and board quali... more This study reports international evidence of the impact of managers' compensation and board quality on the voluntary disclosure of non-GAAP earnings numbers. We find that compensation contracts linked to firm performance create incentives to disclose a non-GAAP figure in the press release of the earnings announcement. Furthermore, managers that benefit from performance-based compensation tend to report non-GAAP figures at the top of the press release (i.e. in the title), make more adjustments for recurring items to GAAP earnings when calculating non-GAAP financial measures, and avoid reporting reconciliations between non-GAAP and GAAP earnings. We also show that an efficient governance structure at the board level can help restrain management discretionary disclosure decisions regarding non-GAAP reporting, particularly the decision to report non-GAAP measures in the press release of annual earnings and the emphasis given to such measures in the press release. measures in annual earnings announcements, (ii) the decision to make adjustments for recurring items to GAAP figures to calculate non-GAAP earnings, (iii) the prominence given to these measures in the press release, and (iv) the decision to disclose a reconciliation justifying differences between non-GAAP earnings and the corresponding GAAP measure. These four decisions may change users' perceptions about firm performance and thus are likely to be used by managers in a discretionary way. When managers' compensation is directly linked to performance we expect managers to disclose non-GAAP figures more often, to exclude from GAAP earnings expenses that have a recurring nature, to give non-GAAP figures more prominence in the earnings announcement press release, and to disclose reconciliations less frequently.

Research paper thumbnail of Impression Management and Non-GAAP Reporting in Earnings Announcements

SSRN Electronic Journal, 2000

This paper analyzes whether managers combine two mechanisms capable of influencing investors' jud... more This paper analyzes whether managers combine two mechanisms capable of influencing investors' judgments in earnings announcements. Specifically, we study whether managers use impression management techniques to emphasize non-GAAP earnings measures when announcing annual results. The study is carried out on an international sample of European countries, during [2003][2004][2005]. The method used is manual content analysis. We find evidence that managers use impression management techniques as a complement to the disclosure of non-GAAP earnings measures.

Research paper thumbnail of The Effects of Women on Corporate Boards on Firm Value, Financial Performance, and Ethical and Social Compliance

Journal of Business Ethics, 2014

Research paper thumbnail of Non-GAAP Financial Disclosures: Evidence from European Firms' Press Releases

SSRN Electronic Journal, 2000

... Helena Isidro Cass Business School – City University London Helena.Isidro.1@city.ac.uk Ana Ma... more ... Helena Isidro Cass Business School – City University London Helena.Isidro.1@city.ac.uk Ana Marques ... explained by managers, but that this percentage has been growing. Key words: non-GAAP financial measures; pro forma earnings; voluntary disclosure. Page 3. ...

Research paper thumbnail of Beating Strategic Earnings Benchmarks with Non-GAAP Figures: International Evidence*

SSRN Electronic Journal, 2000

This study explores international differences in the use of one non-GAAP earnings measures to mee... more This study explores international differences in the use of one non-GAAP earnings measures to meet strategic earnings benchmarks. We hand-collect information on non-GAAP disclosures from earnings announcements press releases and find that the majority of firms report more than one non-GAAP measure in press releases.

Research paper thumbnail of Response to Discussion of: The Effects of Compensation and Board Quality on Non-GAAP Disclosures in Europe

The International Journal of Accounting, 2013

Research paper thumbnail of The Effects of Compensation and Board Quality on Non-GAAP Disclosures in Europe

The International Journal of Accounting, 2013

Research paper thumbnail of The Role of Institutional and Economic Factors in the Strategic Use of Non-GAAP Disclosures to Beat Earnings Benchmarks

European Accounting Review, 2014

Research paper thumbnail of Value-Driving Activities in Euro-Zone Banks

European Accounting Review, 2012

The paper develops and tests accounting-based valuation models for commercial banks. Based on Beg... more The paper develops and tests accounting-based valuation models for commercial banks. Based on Begley et al. (2006) framework we propose a valuation model where goodwill is generated by virtually all commercial and investment banking activities. Key features of our model are: developing a relationship between the stream of future cash flows from fee income and value that depends on lending, borrowing and off-balance sheet business; and allowing proprietary investment and trading securities to be positive net present value activities.

Research paper thumbnail of Institutional Investors’ Reaction to SEC Concerns about IFRS and US GAAP Reporting

Journal of Business Finance & Accounting, 2013

ABSTRACT For the period of 2006 to 2008, we collect Comment Letters issued by the SEC that questi... more ABSTRACT For the period of 2006 to 2008, we collect Comment Letters issued by the SEC that question the application of US GAAP by US firms or the application of IFRS by European firms registered with the SEC. We investigate whether institutional investors react to the letters by changing their holdings and whether their responses vary for US registrants and European registrants. We do this via a treatment-effects model in which we test the hypothesis that institutional investors rebalance their portfolio holdings because they view Comment Letters as informative public signals. We find that institutional investors reduce their equity holdings when firms receive SEC Comment Letters, and their negative reactions are most marked for low turnover institutional investors, who we use to represent those informed investors most prepared to incur costs to closely monitor firms. Next, while noting that the number of Letters questioning application of IFRS are smaller in number relative to those questioning application of US GAAP, we investigate whether there are different reactions to Comment Letters questioning different standards. We show that there is a higher probability of the SEC questioning the application of IFRS as compared to US GAAP. After controlling for firm-specific conditions that impact the issuance of a Comment Letter, we show that this higher probability has economic significance because institutional investors’ react more negatively to Comment Letters that question the application of IFRS as compared to US GAAP. A content analysis confirms the economic importance of the Comment Letters. We find that in almost half of all IFRS cases the Comment Letters request amendments to financial statements.

Research paper thumbnail of Dirty surplus accounting flows: international evidence

Accounting and Business Research, 2004

Page 1. Dirty Surplus Accounting Flows: International Evidence Helena Isidro†, John O'Ha... more Page 1. Dirty Surplus Accounting Flows: International Evidence Helena Isidro†, John O'Hanlon‡ and Steven Young‡ ... SFRH/BD/6021/2001) and the Centre for Business Performance at the Institute of Chartered Accountants in England and Wales (Contract 5-414). Page 2. ...

Research paper thumbnail of Dirty surplus accounting flows and valuation errors

Research paper thumbnail of Firm incentives, institutional complexity and the quality of " harmonized " accounting numbers

In this paper, we investigate how firm reporting incentives and institutional factors affect acco... more In this paper, we investigate how firm reporting incentives and institutional factors affect accounting quality in firms from 26 countries. We exploit a unique multicountry setting where firms are required to comply with the same set of international reporting standards. We develop an approach of crosscountry comparisons allowing for differences between firms within a country and we investigate the relative importance of country-versus firm-specific factors in explaining accounting quality. We find that financial reporting quality increases in the presence of strong monitoring mechanisms by means of ownership concentration, analyst scrutiny, effective auditing, external financing needs, and leverage. Instability of business operations, existence of losses, and lack of transparent disclosure negatively affect the quality of accounting information. At the country level, we observe better accounting quality for firms from regulatory environments with stronger institutions, higher levels of economic development, greater business sophistication, and more globalized markets. More importantly, we find that firm-specific incentives play a greater role in explaining accounting quality than countrywide factors. This evidence suggests that institutional factors shape the firm's specific incentives that influence reporting quality. Our findings support the view that the global adoption of a single set of accounting standards in isolation is not likely to lead to more comparable and transparent financial statements unless the institutional conditions and the firm-specific reporting incentives also change.

Research paper thumbnail of Dirty surplus accounting flows: international evidence

Http Dx Doi Org 10 1080 00014788 2004 9729979, Feb 28, 2012

Page 1. Dirty Surplus Accounting Flows: International Evidence Helena Isidro†, John O'Ha... more Page 1. Dirty Surplus Accounting Flows: International Evidence Helena Isidro†, John O'Hanlon‡ and Steven Young‡ ... SFRH/BD/6021/2001) and the Centre for Business Performance at the Institute of Chartered Accountants in England and Wales (Contract 5-414). Page 2. ...

Research paper thumbnail of Analysis of Institutional Investors’ Reaction to the Issuance of SEC's Comment Letters to European IFRS Registrants Versus US GAAP Registrants

Research paper thumbnail of Disclosure of Intellectual Capital in Portugal in the First Decade of the Twenty-First Century

Tourism Management Studies, Apr 12, 2013

Este estudo tem como objectivo o estudo da divulgação voluntária de capital intelectual nos relat... more Este estudo tem como objectivo o estudo da divulgação voluntária de capital intelectual nos relatórios anuais de 32 empresas cotadas na Euronext Lisbon, ininterruptamente de 2001 a 2009. Este estudo difere dos estudos anteriores uma vez que procura analisar a evolução, ao longo dos anos, da divulgação do capital intelectual em Portugal. Os resultados deste estudo indicam que os níveis de divulgação de capital intelectual são muito reduzidos não tendo sido registado um aumento, estatisticamente significativo, no nível de divulgação. Os resultados ainda indicam que em 2001 a categoria de capital intelectual com maior divulgação foi a do capital externo, enquanto nos anos de 2003 e 2005 a categoria com maior nível de divulgação foi a categoria do capital interno. Nos anos de 2007 e 2009 as categorias de capital externo e capital interno apresentam proporções de divulgação muito semelhantes. A categoria do capital humano é a categoria com menor nível de divulgação.

Research paper thumbnail of The Role of Institutional and Economic Forces in the Strategic Use of Non-GAAP Disclosures to Beat Earnings Benchmarks

SSRN Electronic Journal, 2000

... non-GAAP disclosures to beat earnings benchmarks Helena Isidro Instituto Universitário de Lis... more ... non-GAAP disclosures to beat earnings benchmarks Helena Isidro Instituto Universitário de Lisboa (ISCTE-IUL), BRU UNIDE, Lisboa, Portugal ... disclosure choices has been mostly tested in the context of mandatory financial information (Webb et al., 2008; Hope, 2003a). ...

Research paper thumbnail of The Effects of Managers’ Compensation and Board Quality on Non-GAAP Reporting Decisions

SSRN Electronic Journal, 2000

This study reports international evidence of the impact of managers' compensation and board quali... more This study reports international evidence of the impact of managers' compensation and board quality on the voluntary disclosure of non-GAAP earnings numbers. We find that compensation contracts linked to firm performance create incentives to disclose a non-GAAP figure in the press release of the earnings announcement. Furthermore, managers that benefit from performance-based compensation tend to report non-GAAP figures at the top of the press release (i.e. in the title), make more adjustments for recurring items to GAAP earnings when calculating non-GAAP financial measures, and avoid reporting reconciliations between non-GAAP and GAAP earnings. We also show that an efficient governance structure at the board level can help restrain management discretionary disclosure decisions regarding non-GAAP reporting, particularly the decision to report non-GAAP measures in the press release of annual earnings and the emphasis given to such measures in the press release. measures in annual earnings announcements, (ii) the decision to make adjustments for recurring items to GAAP figures to calculate non-GAAP earnings, (iii) the prominence given to these measures in the press release, and (iv) the decision to disclose a reconciliation justifying differences between non-GAAP earnings and the corresponding GAAP measure. These four decisions may change users' perceptions about firm performance and thus are likely to be used by managers in a discretionary way. When managers' compensation is directly linked to performance we expect managers to disclose non-GAAP figures more often, to exclude from GAAP earnings expenses that have a recurring nature, to give non-GAAP figures more prominence in the earnings announcement press release, and to disclose reconciliations less frequently.

Research paper thumbnail of Impression Management and Non-GAAP Reporting in Earnings Announcements

SSRN Electronic Journal, 2000

This paper analyzes whether managers combine two mechanisms capable of influencing investors' jud... more This paper analyzes whether managers combine two mechanisms capable of influencing investors' judgments in earnings announcements. Specifically, we study whether managers use impression management techniques to emphasize non-GAAP earnings measures when announcing annual results. The study is carried out on an international sample of European countries, during [2003][2004][2005]. The method used is manual content analysis. We find evidence that managers use impression management techniques as a complement to the disclosure of non-GAAP earnings measures.

Research paper thumbnail of The Effects of Women on Corporate Boards on Firm Value, Financial Performance, and Ethical and Social Compliance

Journal of Business Ethics, 2014

Research paper thumbnail of Non-GAAP Financial Disclosures: Evidence from European Firms' Press Releases

SSRN Electronic Journal, 2000

... Helena Isidro Cass Business School – City University London Helena.Isidro.1@city.ac.uk Ana Ma... more ... Helena Isidro Cass Business School – City University London Helena.Isidro.1@city.ac.uk Ana Marques ... explained by managers, but that this percentage has been growing. Key words: non-GAAP financial measures; pro forma earnings; voluntary disclosure. Page 3. ...

Research paper thumbnail of Beating Strategic Earnings Benchmarks with Non-GAAP Figures: International Evidence*

SSRN Electronic Journal, 2000

This study explores international differences in the use of one non-GAAP earnings measures to mee... more This study explores international differences in the use of one non-GAAP earnings measures to meet strategic earnings benchmarks. We hand-collect information on non-GAAP disclosures from earnings announcements press releases and find that the majority of firms report more than one non-GAAP measure in press releases.

Research paper thumbnail of Response to Discussion of: The Effects of Compensation and Board Quality on Non-GAAP Disclosures in Europe

The International Journal of Accounting, 2013

Research paper thumbnail of The Effects of Compensation and Board Quality on Non-GAAP Disclosures in Europe

The International Journal of Accounting, 2013

Research paper thumbnail of The Role of Institutional and Economic Factors in the Strategic Use of Non-GAAP Disclosures to Beat Earnings Benchmarks

European Accounting Review, 2014

Research paper thumbnail of Value-Driving Activities in Euro-Zone Banks

European Accounting Review, 2012

The paper develops and tests accounting-based valuation models for commercial banks. Based on Beg... more The paper develops and tests accounting-based valuation models for commercial banks. Based on Begley et al. (2006) framework we propose a valuation model where goodwill is generated by virtually all commercial and investment banking activities. Key features of our model are: developing a relationship between the stream of future cash flows from fee income and value that depends on lending, borrowing and off-balance sheet business; and allowing proprietary investment and trading securities to be positive net present value activities.

Research paper thumbnail of Institutional Investors’ Reaction to SEC Concerns about IFRS and US GAAP Reporting

Journal of Business Finance & Accounting, 2013

ABSTRACT For the period of 2006 to 2008, we collect Comment Letters issued by the SEC that questi... more ABSTRACT For the period of 2006 to 2008, we collect Comment Letters issued by the SEC that question the application of US GAAP by US firms or the application of IFRS by European firms registered with the SEC. We investigate whether institutional investors react to the letters by changing their holdings and whether their responses vary for US registrants and European registrants. We do this via a treatment-effects model in which we test the hypothesis that institutional investors rebalance their portfolio holdings because they view Comment Letters as informative public signals. We find that institutional investors reduce their equity holdings when firms receive SEC Comment Letters, and their negative reactions are most marked for low turnover institutional investors, who we use to represent those informed investors most prepared to incur costs to closely monitor firms. Next, while noting that the number of Letters questioning application of IFRS are smaller in number relative to those questioning application of US GAAP, we investigate whether there are different reactions to Comment Letters questioning different standards. We show that there is a higher probability of the SEC questioning the application of IFRS as compared to US GAAP. After controlling for firm-specific conditions that impact the issuance of a Comment Letter, we show that this higher probability has economic significance because institutional investors’ react more negatively to Comment Letters that question the application of IFRS as compared to US GAAP. A content analysis confirms the economic importance of the Comment Letters. We find that in almost half of all IFRS cases the Comment Letters request amendments to financial statements.

Research paper thumbnail of Dirty surplus accounting flows: international evidence

Accounting and Business Research, 2004

Page 1. Dirty Surplus Accounting Flows: International Evidence Helena Isidro†, John O'Ha... more Page 1. Dirty Surplus Accounting Flows: International Evidence Helena Isidro†, John O'Hanlon‡ and Steven Young‡ ... SFRH/BD/6021/2001) and the Centre for Business Performance at the Institute of Chartered Accountants in England and Wales (Contract 5-414). Page 2. ...

Research paper thumbnail of Dirty surplus accounting flows and valuation errors

Research paper thumbnail of Firm incentives, institutional complexity and the quality of " harmonized " accounting numbers

In this paper, we investigate how firm reporting incentives and institutional factors affect acco... more In this paper, we investigate how firm reporting incentives and institutional factors affect accounting quality in firms from 26 countries. We exploit a unique multicountry setting where firms are required to comply with the same set of international reporting standards. We develop an approach of crosscountry comparisons allowing for differences between firms within a country and we investigate the relative importance of country-versus firm-specific factors in explaining accounting quality. We find that financial reporting quality increases in the presence of strong monitoring mechanisms by means of ownership concentration, analyst scrutiny, effective auditing, external financing needs, and leverage. Instability of business operations, existence of losses, and lack of transparent disclosure negatively affect the quality of accounting information. At the country level, we observe better accounting quality for firms from regulatory environments with stronger institutions, higher levels of economic development, greater business sophistication, and more globalized markets. More importantly, we find that firm-specific incentives play a greater role in explaining accounting quality than countrywide factors. This evidence suggests that institutional factors shape the firm's specific incentives that influence reporting quality. Our findings support the view that the global adoption of a single set of accounting standards in isolation is not likely to lead to more comparable and transparent financial statements unless the institutional conditions and the firm-specific reporting incentives also change.