Question

Which of the following statements properly describe requirements for non-gaap disclosures?

A. management should explain the usefulness of non-gaap measures
B. in company's public disclosures external auditors carefully over see the use of non-gaap measures
C. companies should ensure that non-gaap disclosures are not misleading

Answer 1

Management should explain the usefulness of non-GAAP measures. Companies should ensure that non-GAAP disclosures are not misleading.

Step-by-step explanation:

The correct statements that properly describe requirements for non-GAAP disclosures are:

1. A. Management should explain the usefulness of non-GAAP measures: Companies should provide an explanation of how non-GAAP measures are relevant and helpful in evaluating their financial performance.
2. C. Companies should ensure that non-GAAP disclosures are not misleading: It is important for companies to present non-GAAP measures accurately and avoid potential misinterpretation by investors or stakeholders.

Option B is incorrect because external auditors do not specifically oversee the use of non-GAAP measures in public disclosures.