The American Institute of CPAs’ Conflict Minerals Task Force has developed nonauthoritative guidance to help companies deal with the conflict minerals reporting requirements of the Dodd-Frank Act and Securities and Exchange Commission regulations.
The AICPA noted that the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 mandated disclosure rules, which were passed by the Securities and Exchange Commission in August 2012 about the use of so-called “conflict minerals,” including tungsten, tin and gold, that are mined in the Democratic Republic of the Congo or surrounding countries. While federal law does not prohibit companies from using conflict minerals, nor impose a penalty for doing so, one of the goals of the law is to dissuade U.S. companies from indirectly sourcing conflict minerals, and hence fund the armed groups in the DRC.
The SEC final rule requires issuers who use conflict minerals in their manufacturing processes and supply chain to disclose whether the minerals came from the DRC or the surrounding areas. Under the rule, if a company determines its conflict minerals originated in those countries, it will have to file a conflict minerals report with the SEC and publish it on its Web site. The reports, which will outline to the SEC all of the due diligence the company performed as it sourced its supply chain, must be independently audited. Under the SEC rules, companies will need to file their first conflict minerals disclosure report on May 31, 2014, for the 2013 calendar year and on May 31 in subsequent years.
The AICPA is providing help with complying with the new rules on an AICPA Conflict Minerals Resources Web page, which includes background materials, along with guidance in the form of questions and answers. The page also includes other useful information about the use of conflict minerals, as well as an expanded “Useful Links” section.
Three examples of practitioner’s reports are illustrated in a new questions and answers document (Q&As .10 .12) that has been developed to provide nonauthoritative guidance to address reporting directly on the subject or on management’s assertion for each of the two audit objectives (as described in Q&A .03), the form of the practitioner’s report, and communicating findings required to be communicated by Generally Accepted Government Auditing Standards in an independent private-sector audit of a conflict minerals report.