In Enforcement Action, SEC Underscores Heightened Scrutiny of KPIs in MD&A Reporting


Posted on March 4, 2020, by Mary P. Hansen and Elizabeth A. Diffley in Disclosures, SEC Guidance. Comments Off on In Enforcement Action, SEC Underscores Heightened Scrutiny of KPIs in MD&A Reporting

In February, the Securities and Exchange Commission (SEC) announced a settlement with Diageo plc, a London-based producer of liquor, wine and beer, for failure to make required disclosures of known trends and uncertainties, thereby rendering its required periodic filings materially misleading with respect to its financial results. The enforcement action provided immediate insight into how the Securities and Exchange Commission would act on its recent guidance related to disclosing key performance indicators and other metrics in MD&A reporting. The enforcement action makes it clear that public issuers should expect increased scrutiny of any metrics used to assess business performance and ensure they have appropriate disclosure controls and procedures in place.

For more information, please read our analysis of the settlement and what it says about SEC expectations for MD&A reporting going forward.





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