Investors and other stakeholders of an organization look upon the financial statements to make critical decisions regarding various dealings with the organization. Therefore, an organization’s financial position is very crucial in ensuring that stock owners and other stakeholders are able to make informed decisions. In this regard, the method or the principles used to come up with financial statements are important as they depict whether an informed decision will be arrived at by a person or organization that makes the decision in regard to the financial statements and position. In the recent past, organizations have been reporting their financial positions using pro forma earnings as well as with Generally Accepted Accounting Principles, GAAP. The two accounting procedures and principles are very different as they follow different modes of accounting. In light of this, majority of experts and financial analysts have been divided on the use of pro Forma earnings reports. Those who support it are of the view that this form of accounting helps the investors to concentrate on aspects that help them to fully understand the true financial position of the company (James and Michello, 2010). The ones who are opposed to it argue that pro forma earnings are susceptible to misuse by organizations management to portray the organization in a positive manner in regard to financial position. This paper looks at various aspects of pro forma reporting in efforts to unearth its usefulness to the shareholders and other users of financial statements in an organization. The paper gives an opinion on whether pro forma earnings should be prohibited or not.