WASHINGTON (Reuters) - The head of the Securities and Exchange Commission on Wednesday said her agency is examining whether companies could mislead investors through some of current accounting rules.
Companies must satisfy Generally Accepted Accounting Principles (GAAP) when communicating to the market but industry has leeway in some investor disclosures and that is where SEC chair Mary Jo White says she has concerns.
"You can't mislead what you're doing here," White says she has told company executives.
It can be helpful to drop accounting jargon when trying to clearly explain a company's performance, White said, but "you have to follow the rules."
"It is something we're really looking at," White said at a Chamber of Commerce forum, adding that when it comes to non-GAAP accounting disclosure the SEC may need to "rein that in."