Dallas, TX, May 08, 2013 --(PR.com
)-- As law makers, federal regulators and industry leaders seek solutions to avert future economic meltdowns, public companies face increasing scrutiny. One rule currently under consideration by the Securities and Exchange Commission (SEC) would require Nasdaq-listed companies to establish an ongoing internal audit function similar to that currently required of NYSE-listed companies.
Alyssa Martin, a Risk Advisory Services partner at Weaver, the largest independent accounting firm in the Southwest, said: "The purpose of the proposed rule is to ensure that publicly held companies have a mechanism in place to regularly review and assess their system of internal control and, thereby, to identify any weaknesses and develop appropriate remedial measures."
Perhaps owing to more controversy than expected, the SEC has filed a notice to solicit additional comments on the Nasdaq's proposal. The Commission had until April 22 to approve or disapprove the proposal, but has delayed that decision until June 6 in order to consider the comments that were received and to seek more comments.
If the SEC passes the rule, current Nasdaq-listed companies will need an internal audit mechanism in place by December 31, 2013. Companies that plan to list on Nasdaq after June 30, 2013 may be required to implement an internal audit function before they can list on the exchange.
Martin explains that while the SEC has received “generally negative comments” on the proposed rule, the Nasdaq’s rule-making process allows for amendment or withdrawal.
“Independence, objectivity and insight are key ingredients for successful internal audit. Companies that look closely at and monitor their own governance, risk and control processes can demonstrate a higher level of transparency, preparedness and delivery of best practices. This translates to higher levels of both consumer trust and investor confidence.”
Martin concluded, “Whether this controversial rule passes as proposed, the Nasdaq amends its proposal for public company auditing or the proposal is entirely withdrawn, companies would be wise to consider that a robust internal audit function provides a company's executives with a much stronger understanding of risk, which consequently results in more intelligent decision-making that can directly affect the bottom line.”
Key Points of the Nasdaq’s Proposal to the SEC
As initially proposed to the SEC on March 4, 2013, the new rule includes the following key points:
· Each company must establish and maintain an internal audit function to provide management and the audit committee with ongoing assessments of the company's risk management processes and system of internal control.
· The company may choose to outsource this function to a third-party service provider other than its independent auditor.
· The audit committee must meet periodically with the internal auditors (or other personnel responsible for this function) and assist the board in its oversight of the performance of this function.
· The audit committee should also discuss with the outside auditor the responsibilities, budget and staffing of the internal audit function.
· The audit committee has sole responsibility to oversee the internal audit function and cannot allocate or delegate this responsibility to another board committee.
For more information, contact:
Alyssa G. Martin – Partner, Risk Advisory Services
About Weaverwww.weaverllp.com http://www.youtube.com/watch?v=Nx2LDascd2A&feature=youtu.be
Weaver serves a broad range of clients including large national and international companies, public and privately held businesses, governmental entities and nonprofit organizations. As a top 40 firm in the country, Weaver is also ranked as the largest independent accounting firm in the Southwest by Accounting Today magazine.
Originally founded in 1950, Weaver currently has approximately 500 employees and Texas offices in Austin, Dallas, Fort Worth, Houston, Midland, Odessa and San Antonio. The firm also has operations in Denver, Colorado and Stamford, Connecticut.
In addition to traditional assurance and tax services, Weaver also provides numerous advisory services, including risk advisory; transaction advisory; IT advisory; forensic accounting; litigation support; international tax; property tax; state and local tax; and wealth management services.
For more information about Weaver, contact Katie McGee, Director of Marketing at 972-448-9894 or firstname.lastname@example.org.