Exhibit 1 presents the fourth quarter press release of Allergan. Allergan is a global pharmaceutical company and a leader in a new industry model-Growth Pharma. Allergan's product lines include Botox, Juvederm, Latisse, Namenda, and Restatis. Exhibit 2 presents the reconciliation from GAAP to non GAAP income that was included with the release. Additional supporting information appears after the questions below.

Over the years, Allergan has had many disagreements with SEC about the presentation of non-GAAP metrics in their financial reports and press releases. Allergan's responses to SEC staff comments has been to emphazine that its performance measures "are useful to both management and investors in assessing current performance and Future operations." Moveover, Allergan conteded in its response that "analysts for our industry group base their third party consensus estimates on non-GAAP earnings per share metrics."

Review Exhibit 1 below and answer the following questions.

1. Do you believe Allergan's financial information in its press release is useful? Why or Why not?
2. Do you believe this kind of information should be subject to audit procedures? If so, what procedures should be used? If not, why not?
3. Do you believe the financial and non-financial information provided by Allergan in its press release is veiled attenmpt at earnings management? Explain

Review Exhibit 2 at the end of the case and answer the following questions.

1. Does the reconciliation shed light on the usefulness and understandability of the non-GAAP numbers? Explain
2. Look at each item included in the reconciliation and briefly discuss whether you think each one should or should not be included in a reconciliation from GAAP to non-GAAP.