You might recall that, in 2016 and early 2017, the SEC made a
big push—through a series of staff oral admonitions and
written guidance, as well as an enforcement action—to require
issuers to be more transparent and more consistent in the use of
non-GAAP financial measures and to avoid altogether non-GAAP
measures that were misleading. For example, companies were advised
that they needed to present GAAP measures with equal or greater
prominence relative to the non-GAAP measures. (See,
e.g.,
this PubCo post.) By early 2017, the SEC staff were apparently
sufficiently satisfied (see
this PubCo post) with the responses to their campaign that the
pendulum swung back, and the relentless finger-wagging by the staff
about non-GAAP financial measures appeared to have tailed off. (See
this PubCo post.) But, according to this analysis from Audit Analytics, it wasn't
until this year that the SEC staff's comments regarding
non-GAAP financial measures actually began to decline.
