The Center for Audit Quality (CAQ) released a new report on how auditors can contribute to the reliability and comparability of non-GAAP financial measures and key performance indicators (KPIs). The report includes questions audit committee members can ask to fulfill their oversight responsibilities as they discuss non-GAAP financial measures and KPIs with management and auditors, and questions for investors as they use these measures in their analysis.
“The CAQ report is a useful contribution on the important and complex topic of how companies use non-GAAP reporting to supplement audited financial statements in their communications with shareholders and the role auditors could and can play,” said Wes Bricker, PwC’s vice chair and assurance leader for the United States and Mexico and former chief accountant at the Securities and Exchange Commission (SEC). “The location of non-GAAP reporting results in a difference in whether the auditor typically does work on the measures, which is important for boards, investors, and stakeholders to understand about the auditor’s role.”
