Ignore GAAP at Suffolk University

Accounting students at Sawyer Business School have been working on a national report about the earnings of S&P 500 companies. While GAAP is the standard accounting principle in the US, some companies also use non-GAAP measures. Dominic Rinaldi, a BSBA ’25 student, was surprised when he and his classmates were introduced to non-GAAP reporting in addition to GAAP during their time at Suffolk University. Non-GAAP measures provide a different perspective of financial performance by adjusting or excluding specific items from standard GAAP calculations to offer investors a more relevant picture.

Rinaldi explained that understanding the reasons behind companies making these adjustments is crucial for accounting professionals. By learning to analyze non-GAAP data and question adjustments, students can gain a deeper insight into a company’s financial reporting practices. Through Suffolk University’s winter internship program, students delved into non-GAAP reporting, gathering detailed data from company disclosures. This data was then analyzed by Calcbench, a renowned data analysis platform, and results were published in Barron’s in the early summer.

Professor Tracey Riley from the Accounting & Business Law Department at Sawyer Business School highlighted the importance of students questioning non-GAAP adjustments and investigating industry trends. This partnership between Calcbench and Suffolk University has been ongoing for four years, with each year becoming more integrated and mutually beneficial. Students underwent various classes to understand non-GAAP concepts and the research process, making them equipped to tackle real-world financial reporting challenges.

Initially, students were puzzled as to why they needed to learn about non-GAAP reporting when they had focused solely on GAAP throughout their Suffolk University education. However, Riley emphasized the significance of future accountants comprehending whether non-GAAP earnings can serve as an indicator of a company’s future performance. While GAAP remains the gold standard, the widespread acceptance of non-GAAP reporting underscores the necessity for accounting professionals to be well-versed in both systems.

The involvement of Suffolk University students in analyzing non-GAAP data provides them with valuable experience, enabling them to critically evaluate financial reports beyond the scope of traditional accounting principles. Through this collaboration, students not only enhance their technical skills but also develop a deep understanding of the complexities of financial data interpretation. The partnership between the university and Calcbench demonstrates a commitment to providing students with hands-on experience in real-world financial analysis, setting them up for success in their future accounting careers.