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ARTICLE · 31 MARCH 2016

It's Time Again For Audit Committees To Mind The Non-GAAP

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Judging by the frequency of recent news reports and SEC staff speeches focused on non-GAAP financial measures, audit committees may be well served to take a fresh look at the non-GAAP measures reported by their companies.

United StatesAccounting and Audit
Jonathan Wolfman
Jonathan Wolfman
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Judging by the frequency of recent news reports and SEC staff speeches focused on non-GAAP financial measures, audit committees may be well served to take a fresh look at the non-GAAP measures reported by their companies and the prominence which those non-GAAP measures are given over GAAP measures.

The most recent SEC staff remarks came from SEC Chief Accountant James Schnurr in a March 22 speech at a life sciences accounting conference. Mr. Schnurr ended his speech, which largely touched on items relating to the transition to the new accounting standard for revenue recognition and on internal controls, by turning to non-GAAP measures, commenting on the SEC staff's:

  • observation of a "troubling increase over the past few years in the use of, and nature of adjustments within, non-GAAP measures by companies"

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