Workshop Series: Ann Tarca
We investigate the relationship of release of pro forma earnings (PFE) by Australian firms and the incidence and amount of IFRS remeasurements related to financial instruments and impairment. We consider the usefulness of PFE using tests of their association with properties of analyst forecasts and share prices. Our sample includes 613 firm-years over the period 2008-2010. As expected, PFE disclosure is more likely for firms with higher incidence of analyst adjustments and larger amounts of IFRS remeasurements in their financial statements (losses on financial instruments; impairment reversals) as well as non-recurring items (gains on mergers; losses on restructuring activities). We find evidence of the usefulness of PFE disclosure as firms with larger PFE/GAAP earnings differences have lower analyst forecast error and less dispersion and PFE/GAAP earnings differences are positively associated with share prices.
Professor Ann Tarca, PhD, MAcc, BCom, FCA is Winthrop Professor and Head of the Discipline Group in Accounting and Finance in the Business School at the University of Western Australia. She has over 20 years teaching experience, with the last fifteen years being at UWA. She obtained her PhD and MAcc from UWA during this time. Her teaching interests include financial accounting classes with both undergraduate and post graduate students. She is a co-author of the leading accounting textbook Godfrey, Hodgson, Holmes and Tarca (2010) Accounting Theory 7th Edition, John Wiley and Sons, Brisbane. Teaching highlights include winning a UWA Business School Excellence in Teaching Award in 2008 and being a visiting professor at the Amsterdam Business School in the autumn semester 2007. In 2011-2012 Ann was an academic fellow at the IASB in London, working on the IASB education initiatives. Ann's research focuses on the regulation of financial reporting, particularly standard setting, the adoption of international accounting standards, and harmonisation and enforcement of reporting requirements at an international level. She has published in well recognised international including Abacus, Accounting and Business Research, British Accounting Review, European Accounting Review, Journal of International Financial Management and Accounting, The International Journal of Accounting and Journal of Contemporary Accounting and Economics. She has an author ranking in the world's top 1% on the Social Sciences Research Network database. Career highlights include holding one of the inaugural KPMG/IAAER research grants (for a project on reporting financial performance) and winning the Blackwell's/Synergy Award for the most downloaded paper in the Journal of International Financial Management and Accounting in 2006 and 2007 for her 2004 paper entitled "International convergence of accounting practices: Choosing between IAS and US GAAP".