According to the New York Times, a recent study shows that 90 percent of companies in the Standard & Poor’s 500-stock index reported non-GAAP results last year, which is up from 72 percent in 2009.
1. Do you think investors truly understand the consequences of this?
2. Which one of the tactics used do you find to be the most troubling?
3. Why do you think the SEC has not been more aggressive in stopping this practice?
Morgensen, G. (2016). Fantasy Math Is Helping Companies Spin Losses Into Profits. The New York Times, Apr. 22 (Retrievable online at http://www.nytimes.com/2016/04/24/business/fantasy-math-is-helping-companies-spin-losses-into-profits.html)