CAQ Releases New Non-GAAP Measures Tool For Audit Committees

While the frequency of SEC comments on companies' disclosure of non-GAAP measures has subsided, it remains important for audit committees to ensure their companies' disclosures comply with applicable non-GAAP disclosure rules. To assist in this regard, the Center for Audit Quality has released a new report titled Non-GAAP Measures: A Roadmap for Audit Committees. The report summarizes general themes emerging from three roundtable discussions that the CAQ hosted in 2017 regarding the presentation and use of non-GAAP measures and provides some guidance for audit committees to consider when reviewing their companies' preparation and disclosure of non-GAAP measures. Notably, use of the term "non-GAAP measures" in the report refers to measures defined as "non-GAAP" under SEC rules and also to key performance indicators (KPIs), which are not directly subject to the SEC's non-GAAP rules but which the SEC staff has suggested may need to be accompanied by similar disclosures.