CAQ Issues New Roadmap For Audit Committees On Non-GAAP Measures

The Center for Audit Quality has issued a new guide for audit committees related to non-GAAP financial measures. Based on information gained from a series of roundtables held in 2017, Non-GAAP Measures: A Roadmap for Audit Committees identifies common themes and key considerations for audit committees, including leading practices to help assess whether a company's non-GAAP measures present "high-quality non-GAAP measures." And what exactly is a "high-quality non-GAAP measure"? According to the CAQ, a non-GAAP measure is high-quality if it provides a "balanced representation of the company's performance."

When presented appropriately, the roadmap concludes, non-GAAP measures can provide useful information, but that means that they must be "transparent, calculated consistently, and comparable to measures disclosed by other companies." The CAQ hopes that "enhancing audit committee oversight and involvement will lead to more transparency and consistency and that it will