An International Meeting of the American Accounting Association American Accounting Association 2006 Annual Meeting August 6–9, 2006 Washington, D.C.

Lisa Hersrud
University of Oregon

Abstract: To investigate the implications of a recent proposal by the SEC to eliminate the U.S. GAAP earnings reporting requirements for certain cross-listed firms, I examine the value-relevance of Form 20-F reconciliations. In studying the market reaction to the filing of Form 20-F, I find limited evidence indicating a significant market reaction to the filing of Form 20-F. The results vary depending on the foreign GAAP utilized. Additionally, I find no evidence of a positive association between U.S. GAAP earnings and U.S. returns. These results should be interpreted with caution due to the small size of the sample. Furthermore, it remains to be seen whether the removal of U.S. GAAP earnings from the information system of certain cross-listed firms will have adverse implications on the way the market integrates the information contained in earnings.

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