Oh Look, A Non-GAAP Warning

The SEC has long cast a skeptical eye toward the non-GAAP financial disclosures that companies like to report to investors. Now we have an example of the SEC warning a company that its non-GAAP numbers are too vague, in case any financial reporting enthusiasts out there want to heed that lesson as you compile your…

Read More

Wells Fargo, Part III: Mundane Securities Stuff


Today we get more pedestrian with Wells Fargo and its unauthorized accounts scandal. Sure, the misconduct was egregious and leadership was a disgrace — but how, precisely, did Wells Fargo violate securities law and get a $500 million wallop from the SEC?  By sketchy use of non-financial metrics.  You almost have to laugh. Wells Fargo…

Read More

Non-GAAP Reporting, Popular as Ever

Non-GAAP financial metrics are back in the news today thanks to a fresh report from Audit Analytics, which finds that almost all large companies now report at least one such metric in their financial statements, and that the number of non-GAAP metrics the average filer reports has tripled in the last 20 years. Audit Analytics…

Read More

When Non-GAAP Reporting Meets FCPA

Maxwell Technologies reported its second-quarter earnings yesterday with this nugget: the company reported non-GAAP net income 46 percent higher than its GAAP-approved net income—and listed FCPA investigation costs as one of the adjustments it made to get that higher number. The adjustment, all of $62,000, didn’t help much. Maxwell reported a net loss of $10.1…

Read More

Three Points to Prepare for Non-GAAP

Just in time for fourth-quarter audit committee meetings, everyone’s favorite financial reporting punching bag for 2016 is back: non-GAAP financial metrics! When we last visited non-GAAP metrics in July, the chatter against this quasi-scourge was rising. The SEC didn’t like it, the PCAOB didn’t like it, governance activists didn’t like it. Then everyone seemed to…

Read More

Tech Sector: Flouting the Spirit of GAAP Rules

stock option

Not long ago a group of corporate chieftains here in the United States—the CEOs of General Motors, Verizon, JP Morgan, BlackRock, Berkshire Hathaway, and others—published an open letter calling for several improvements to corporate governance. One of their complaints was the increasing use of non-GAAP financial reporting metrics, when companies should stick to Generally Accepted…

Read More

Better Ways to Look at Non-GAAP Accounting

Well, it’s happened. The financial reporting world has reached peak non-GAAP discussion. The moment happened sometime last week. We had two research reports about use of non-GAAP accounting metrics published at the same time (one from Audit Analytics, the other from Calcbench and Radical Compliance), and a speech from Securities & Exchange Commission chairman Mary…

Read More

In-Depth Report: A Look at Non-GAAP Metrics


One of the big messages from regulators this year has been concern about companies’ use of non-GAAP financial metrics. Well, I’m happy to say that Radical Compliance has just released one of the first in-depth reports on the subject, trying to understand how widespread use of non-GAAP metrics really is and what drives companies to…

Read More