"Most conversations are simply monologues delivered in the presence of a witness." – Margaret Miller
Two things have happened recently that you need to be aware of if you're a Canadian SEC registrant.
The first is that the SEC has begun to review and comment on first time IFRS financial statements included in Canadian SEC filings. If you haven't got one already, you can expect a friendly letter soon. Remember, too, that communications with the SEC are a matter of public record.
The second relates to communications between auditors and audit committees. In August, the US Public Company Accounting Oversight Board approved new requirements for the auditor to discuss:
- Its evaluation of the quality of the company's financial reporting.
- Certain matters about the company's accounting policies and practices on estimates including a description of the processes and assumptions management used in critical estimates.
- Significant unusual transactions including the underlying business rationale.
- Its views on significant accounting or auditing matters when they are aware that management has consulted with other accountants about these matters and the auditor has a concern.
The new rules also formalize PCAOB required communications that many auditors already are making to audit committees as a matter of practice or as the result of other regulations (e.g. audit strategy and risks, specialized skill needs (such as actuaries, valuators and others), principal auditor determinations, concerns about management's proposed adoption of new standards, outside consultations, contentious matters, going concern issues, qualifications in audit reports, etc.)
The requirements, if approved by the SEC, would apply for years beginning on or after December 15, 2012 however, there may be some scope exceptions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.