Deceptive Non-GAAP Financials

The SEC has stepped up its enforcement of public companies’ misleading use of non-GAAP financial measures. These measures are susceptible to abuse, and they can distort financial statements and mislead investors. See the recent article in Accounting Today, Deceptive non-GAAP financials will lead to future SEC whistleblower awards, for details on the recent increase in deceptive non-GAAP financials. The SEC has established an internal task force to investigate public companies’ use of misleading non-GAAP accounting.