July 26, 2016

Non-GAAP Measures: Checking Internal Controls & Audit Committee Tools

As the transcript for our recent webcast – “Non-GAAP Disclosures: The SEC Speaks!” – continues to be wildly popular since it featured Corp Fin’s Chief Accountant Mark Kronforst & heavyweights Meredith Cross and Dave Lynn, we continue to post a ton of memos about Corp Fin’s new CDIs – as well as this new non-GAAP tool for audit committees.

As part of its focus on non-GAAP measures, Corp Fin has questioned whether companies (& their audit committees) have implemented appropriate controls regarding the disclosure of such measures. This memo discusses the types of controls that could be established and provides high-level examples of control issues and related responses for consideration in connection with non-GAAP measures.

General Motors recently tweeted earnings results including adjusted results. And here’s a few MarketWatch pieces entitled:

– “GE’s earnings report may not be wrong, but it may still mislead investors

– “How FedEx changed its earnings release after SEC warning

Non-GAAP Measures: A Review of Old Corp Fin Comments

This Audit Analytics blog analyzes Corp Fin comments in the non-GAAP area from a period – 2014-2015 – before the new CDIs were issued. These comments don’t necessarily reflect what Corp Fin is focusing on now given the new guidance…

More on our “Proxy Season Blog”

We continue to post new items regularly on our “Proxy Season Blog” for members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:

– Japan: First Signs of Activism
– Investor Policies: Director Age & Tenure Limits
– NYC Pension Funds: Proxy Voting Guidelines Updated
– State Street Global Advisors: How It Voted
– Who Decides Whether a Shareholder Has Complied With An Advance Notice Bylaw?

Broc Romanek