SEC Starting To Worry About Non-GAAP Earnings

We’ve been sounding the alarm on non-GAAP earnings for several years now. Companies exploited the wide leeway granted by the SEC to present their business in a more favorable light. What was originally intended to be a supplement to GAAP results has in many ways replaced them. Too many investors in the market seem to implicitly trust non-GAAP earnings without digging deeper to understand the misleading way companies exclude real expenses.