The American Institute of CPAs’ Conflict Minerals Task Force has developed two new Q&A documents on conflict mineral disclosures mandated under the Dodd-Frank Act.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 included a provision requiring public companies to file reports on the use of materials such as tin, gold, tungsten and tantalum to help determine whether their mineral purchases might inadvertently be funding armed groups in the Democratic Republic of the Congo and surrounding countries in war-torn Africa. The SEC subsequently approved regulations in 2012 spelling out the requirements for conflict minerals reporting, and the rules survived a court challenge last year (see Appeals Court Refuses to Stay Conflict Minerals Rule).
However, the rules have been confusing for many companies to implement, and their impact on the situation in the Congo has received mixed reviews.
The AICPA has set up a task force to help CPAs cope with the recent requirements and issued nonauthoritative guidance to answer questions that might come up.
The two new questions and answers documents (Q&As .14.15) address matters that auditors might wish to cover within management representation letters, along with the auditor’s responsibility with respect to internal controls.
The Q&A documents discuss representations that a practitioner might obtain from management in an engagement to perform an independent private-sector audit, or IPSA, of a conflict minerals report, or CMR. The Q&A documents also outline the practitioner's responsibility with respect to gaining an understanding of and testing internal controls in performing an IPSA.
In addition, the AICPA task force has updated its CMR Depiction Exhibit based on CMRs that have already been filed and to reflect recent SEC guidance. The AICPA Conflict Minerals Resources page includes background, previously issued Q&As .01.13, Q&As on independence, and other useful information about the use of conflict minerals, along with a Useful Links section.
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