Governance IssuesTM
Volume 2021, No. 4
November 16, 2021
In This Issue
Tackling SEC disclosure requirements to conclude on ICFR effectiveness and climate change impacts are on the agenda, along with visiting a recent SEC staff statement on audit quality and gatekeeper responsibilities. Understanding and complying with these topics will help companies stay within the good graces of the SEC.
Management must provide reasonable support for their assessment on the effectiveness of ICFR, including using a framework and properly concluding on the severity of deficiencies
Now is a great time to revisit internal control over financial reporting (ICFR) disclosures since public companies with fiscal years ending in December will be concluding soon upon their ICFR effectiveness. Management, especially the certifying officers, must fully understand the 10-K disclosure report entitled Management's Annual Report on Internal Control Over Financial Reporting. This report involves much more than simply fulfilling a disclosure requirement through ‘boiler-plate’ language.
The SEC’s Division of Corporation Finance recently released a sample letter to companies regarding climate change disclosures. Such disclosures are currently a focus area of the SEC. 
SEC's Chair has directed staff to compile recommendations for potential mandatory disclosures on climate-related matters
The Importance of High Quality Independent Audits and Effective Audit Committee Oversight to High Quality Financial Reporting to Investors
Paul Munter, Acting Chief Accountant, Office of the Chief Accountant, issued a statement on October 26, 2021, emphasizing the importance of high-quality audits and for all financial reporting gatekeepers (auditors, management, and their audit committees) to fulfill their shared responsibilities. He emphasizes that auditor independence, both in fact and appearance, is foundational to the credibility of the financial statements.
Kral Ussery is a national CPA firm providing services that external auditors cannot due to independence concerns, such as accounting advisory, audit readiness, and internal audits. Download our services flyer.
About Governance IssuesTM
Governance IssuesTM is an electronic newsletter published by Kral Ussery LLC, a public accounting firm delivering advisory services, litigation support and internal audits. The newsletter focuses on our practice areas of SEC compliance, internal controls, IT general controls, risk assessments, IPO readiness, M&A transactions, US GAAP compliance and internal auditing.
Content in this newsletter is for general information purposes only and should not be used as a substitute for professional consultation.
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