Capitol Report: SEC is gearing up for next smackdown on bogus earnings numbers

The Securities and Exchange Commission is getting ready for the next step in its effort to crack down on the use by companies of customized numbers that the regulator says can mislead investors.

In May, the SEC’s Division of Corporation Finance confirmed it had established an internal task force to closely review the use of “non-GAAP” numbers — those that do not comply with Generally Accepted Accounting Principles—and to check whether companies were responding to new guidance on those metrics that was issued on May 17.

See also:SEC targets companies who use made-up accounting metrics

Keith Higgins, director of the SEC’s corporation finance division, told MarketWatch in an email on May 31, that “staff will be incorporating this new guidance into our review of filings, which we expect will result in the issuance of comment letters directed at those practices.

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