The SEC’s Cracking Down on All This Adjusted Earnings B.S.

Jon Economy, Government, Market Commentary

For the past several months, the Securities and Exchange Commission (SEC) has been working to crack down on the use of adjusted earnings practices.
They’re threatening to tighten regulations and force companies to be more transparent.
That word always comes with a sting. Regulations – the dreaded ‘R’ word. It’s perhaps the most hated word in all of finance.
Indeed, new regulations could pose a major problem for thousands of U. S. companies. Investors might finally realize the emperor has no clothes.
Last week, The Wall Street Journal published an article stating that the SEC will continue to expand its recent policy. Beyond the increased use of adjusted earnings per share, companies have also been relying on non-GAAP measures of accounting. The SEC realizes that’s got to stop.
GAAP stands for ‘generally accepted accounting principles.’ So, non-GAAP basically stands for ‘free-for-all.’

This post was published at Wall Street Examiner by John Del Vecchio ‘ May 26, 2016.