Trade Resources Economy Public Companies Subject to The SEC's Conflict Minerals Reporting

Public Companies Subject to The SEC's Conflict Minerals Reporting

Public companies subject to the SEC’s conflict minerals reporting requirements must file their first Conflict Minerals Report (CMR) by June 2, 2014.  During the next several months, companies will need to make decisions concerning the content and wording of these new reports.

An important factor in those decisions will be the position that auditors and others will take with respect to the criteria governing management’s disclosures and  due diligence efforts. While many companies will not need to obtain an independent audit this year, companies should be aware of the conflict minerals audit requirement so that they will be in a position to obtain an audit for subsequent reports.

On January 14, 2014, the American Institute of Certified Public Accountants issued guidance that contains key information about the independent private sector audit (IPSA) requirement in the conflict minerals reporting rules. Public companies that retain CPAs, such as their financial statement auditor, to perform the IPSA will need to make sure that their report satisfies the AICPA’s requirements for “auditability”. Companies will also need to be prepared to furnish their IPSA auditor with the documentation and management representations described in the AICPA’s guidance.

The SEC’s rules create an unusual situation in which companies are not required to use the services of a CPA to perform this new audit. Companies may chose between an IPSA “attestation engagement” by a CPA or a “performance audit” which can be conducted by a qualified person who is not a CPA.   While the AICPA’s guidance does not apply to performance audits, as a practical matter, such audits are likely to be generally similar.

Contribute Copyright Policy
SEC Conflict Minerals Reporting on The Horizon