On May 18, 2016, the Public Company Accounting Oversight Board (PCAOB) held a Standing Advisory Group meeting. One of many topics discussed was the spread of non-GAAP earnings reporting. The PCAOB’s meeting was held one day after the Securities and Exchange Commission’s (SEC) Division of Corporation Finance (DCF) released a new Compliance & Disclosure Interpretation, intended to regulate some more careless practices observed by the Division’s staff.
Audit Analytics compiled data on recent SEC comment letters sent to companies regarding their presentation of non-GAAP earnings. This Audit Analytics article ponders what might lie ahead when the SEC’s Division of Corporation Finance tamps down on fringe non-GAAP reporting.