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Companies fixed prominence most in non-GAAP sweep

Tammy Whitehouse | December 13, 2016

In responding to regulatory pushback to uses of non-GAAP accounting, the majority of companies made changes to how prominently they displayed such figures, according to a recent analysis of non-GAAP disclosures by S&P 500 companies.

A new report from Audit Analytics based on second-quarter 2015 filings shows 202 companies among the S&P 500 presented one or more data points derived following non-GAAP accounting more prominently than the accepted GAAP number. That’s a violation of the provisions that allow companies to present non-GAAP data in ways that would not be misleading to investors.

The Securities and Exchange Commission began calling out excessive use of non-GAAP metrics in communications to investors, especially where companies were presenting such measures in ways that would potentially pull the wool over the eyes of financial statement...

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