Welcome to the inaugural edition of SIMPLY STATED.
The world of accounting and tax is complex. New rules and regulations are constantly being introduced; practice and procedures are in a perpetual state of flux. It’s hard to know how all those changes will impact you because they are seldom obvious or simple.
As a leading international, full service CPA firm it’s our job to keep up with those changes. And though we’d like to share all those with you, we appreciate the fact that your time and patience has its limits.
That is why we created SIMPLY STATED.
When we spot important issues, our professionals will first analyze its impact, break it all down, and then communicate it here in the clearest and most cogent manner. We’ll give you the gist and will be available to discuss specifics.
How often can you expect to see SIMPLY STATED? Only when we have something important to say. We figure your email box already has too much of the other stuff.
SEC TO ACT ON NASDAQ’S PROPOSAL TO EXPAND INTERNAL AUDIT REQUIREMENT
The Securities and Exchange Commission (SEC) just announced that it has designated June 6, 2013 as the date when it will act on the Nasdaq Stock Market’s proposed new rule which would require its listed companies to establish an internal audit function.
The new rule was proposed by NASDAQ in late February in an effort to align itself with the New York Stock Exchange. It has been in the comment phase according to the SEC, which just decided to extend the period for SEC action to June 6th.
If enacted, this internal audit function would be required to provide management and the audit committee with ongoing assessments of the company’s risk management processes and system of internal control. In addition, the rule would require the audit committee to meet periodically with the company’s internal auditors (or other personnel responsible for this function) and discuss the responsibilities, budget, and staffing of the company’s internal audit function with the outside auditors.
What is the impact to Nasdaq-listed companies?
Accelerated filers: These companies must have an annual audit of the effectiveness of their internal financial and reporting controls as part of their Sarbanes Oxley compliance. As such these companies probably have the equivalent of an internal audit or other independent party that performs the functions required under the proposed rule. These companies should review existing procedures to assure it also would meet the requirements of the new rule. Impact not significant.
- Smaller companies: Smaller companies that currently are not required to have an annual audit of the effectiveness of their internal financial and reporting controls would need to hire internal auditors that report directly to the audit committee, or must find other means of complying with this requirement. These companies would be permitted to outsource their internal audit function to a third-party service provider such as another independent accounting firm. It is important that companies currently without an internal audit function address this issue prior to the end of 2013. Impact very significant.
The proposal would require companies listed on Nasdaq on or before June 30, 2013 to establish an internal audit function by no later than December 31, 2013. Companies which list after June 30, 2013 will be required to establish an internal audit function PRIOR to listing.
While the change in the rule is consistent with the movement for increased corporate governance, smaller companies will be most impacted by a significant increase in costs to their already tight operating budgets. Many of these companies may decide the new requirement too onerous and move to an alternate exchange. This will also become a factor for late-stage private companies as they weigh the cost of going public and deciding where best to be listed.
For more information on this new proposal, please contact:
Corey Fischer, CPA
Managing Partner, Los Angeles
Corey Fischer is the Firm Managing Partner.
With more than 25 years of experience, he has worked extensively with large national CPA firms, and also has been an SEC reporting officer for a number of NASDAQ listed companies. Corey is an expert in financial reporting, SEC compliance, raising debt and equity, mergers and acquisitions, and structuring accounting operations. His unique combination of public and private accounting experience gives him a thorough understanding of both the financial and operational needs of public companies worldwide in the following industry sectors: Consumer Products, Distribution, Clean Energy, Life Sciences, Entertainment and Leisure Time Industries.
Weinberg & Company News:
WEINBERG & COMPANY ADDS CLIENTS; ACCOUNTING TODAY FEATURES WEINBERG IN ITS AUDIT CLIENT WINS SURVEY
Weinberg & Company continues to win client engagements, experiencing a noteworthy increase in the number of clients added in the first quarter of 2013, predominantly in the Leisure Time and Life Sciences industries.
This builds on successes in 2012, earning recognition from industry peers. Recently, Weinberg & Company was highlighted in Accounting Today’s First Annual Scorecard for New SEC Audit Clients as one of the auditors who “turned in noteworthy performances.”
The survey, published in the February 27, 2013 edition, was based on tracking by audit analysis provider Audit Analytics, which compared audit client wins and losses from Big 4-sized to regional accounting firms.
In the “Beyond the Big Four” section, Accounting Today said, “Finally, we’ll shine a spotlight on Weinberg & Co., the only non-Top 100 Firm to break into the top ranks of audit fees for new client engagements. With over $4 million from its net eight new clients, it truly punched above its weight, joining the likes of the Big Four firms, Grant Thornton and Crowe Horwath.
Simply the right choice
Weinberg & Company is a leading, international, full service, multi-office CPA firm serving clients throughout the United States and the Pacific Rim. Founded in 1992, the practice groups include: Assurance and Audit, Tax and Accounting, and Advisory Services. Weinberg has a depth of knowledge and experience to meet the needs of both public and privately held companies, high net worth individuals, entrepreneurs, family offices, and can provide customized business management services. www.weinbergla.com
1925 Century Park East, Suite 1120
Los Angeles, CA 90067
Firm Managing Partner
Director of Tax,
Assurance & Audit
Tax & Accounting
Leisure Time Industries
Media & Entertainment