CAQ Tool Helps Audit Committees Examine Use of Non-GAAP Measures

Publication aims to spur robust dialogue among audit committees, management, and auditors

Washington, DC– The Center for Audit Quality (CAQ) has released a new tool to help audit committees continue to assess management's presentation, outside the audited financial statements, of performance metrics that do not conform to Generally Accepted Accounting Principles (GAAP). The publication, Questions on Non-GAAP Measures: A Tool for Audit Committees, can assist in the determination of whether non-GAAP indicators provide investors with meaningful financial information.

“Concerns and questions from regulators and investors have grown around the use of non-GAAP measures in communications such as regulatory filings and press releases,” said Cindy Fornelli, executive director of the CAQ. “This tool can help audit committees probe whether such measures are accurate, appropriate, and useful to investors.”

Questions on Non-GAAP Measures groups its questions under three core categories:

Additionally, the tool reviews current regulation governing non-GAAP information, as well the auditor's role in this area. Public Company Accounting Oversight Board (PCAOB) standards require the auditor to read this additional information for consistency with the financial statements.

Questions on Non-GAAP Measures: A Tool for Audit Committees is available at the CAQ website.