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New CAQ Paper Promotes Stakeholder Dialogue on Non-GAAP Financial Measures

Monday, December 5, 2016

Washington, DC – When presented appropriately, non-GAAP financial measures can provide useful insights about a company, says the Center for Audit Quality (CAQ) in a new publication: Non-GAAP Financial Measures: Continuing the Conversation. To increase the usefulness of those insights to investors and other users, the paper calls for a robust conversation across the financial reporting supply chain regarding the preparation, presentation, and use of these measures.

“The public company auditing profession is in a unique position to foster a dialogue about non-GAAP financial measures and what might be done to enhance public confidence in them,” said CAQ Executive Director Cindy Fornelli. “With its focus on the perspectives of various constituencies throughout financial reporting, this new resource can help stimulate that dialogue.”

Non-GAAP Financial Measures: Continuing the Conversation explores the issue of non-GAAP information, providing context on its definition and use, pertinent regulatory developments, and the current level of auditor involvement. While auditors do not audit non-GAAP metrics, the paper notes, audit committees and management may consider using auditors as a sounding board when evaluating them.

Additionally, the paper compiles sets of suggested questions for each stakeholder group to consider as it relates to their preparation or use of non-GAAP financial measures. These stakeholders include management, investors, investment analysts, securities counselors, audit committee members, internal auditors, independent auditors, regulators, accounting standard setters, and academics.

Non-GAAP Financial Measures: Continuing the Conversation builds on the CAQ’s June 2016 publication, Questions on Non-GAAP Measures: A Tool for Audit Committees, also available free of charge at the CAQ website. The CAQ plans to use the questions in these papers at roundtables and panels to further the dialogue around non-GAAP financial measures. 

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The Center for Audit Quality (CAQ) is an autonomous public policy organization dedicated to enhancing investor confidence and public trust in the global capital markets. The CAQ fosters high quality performance by public company auditors, convenes and collaborates with other stakeholders to advance the discussion of critical issues requiring action and intervention, and advocates policies and standards that promote public company auditors’ objectivity, effectiveness, and responsiveness to dynamic market conditions. Based in Washington, DC, the CAQ is affiliated with the American Institute of CPAs. For more information, visit