The number of comment letters the SEC sends to filers drastically decreased during the first six months of 2018, but the number of letters focused on non-GAAP metrics increased—indicating that use of non-GAAP metrics is dominating the SEC’s enforcement activities.
The Audit Analytics data suggests keeping an eye on non-GAAP measures that are complicated by complex accounting practices and require detailed explanations, to see if the SEC will continue to nudge or if companies will voluntarily step up clarification of their financial statements.