The NASD OTC Securities Exchange has urged all listed equities on the exchange to comply with the recently issued guidance on the implementation of sections 60-63 of the Securities and Exchange Commission (SEC) Investment Securities Act of 2007 before the expiration of the extended December 2023 deadline.
The NASD, in a circular on Thursday to all market participants, said the commission in its statement by virtue of which it extended the deadline for public companies, requires directors of public companies to implement relevant internal controls over financial reporting, and for auditors to review and issue a statement on the existence, adequacy and effectiveness or otherwise of these internal controls.
The SEC had in March this year, issued a statement urging companies to comply with its guidance on the Implementation of Sections 60-63 of the ISA with the deadline for the implementation set for the end of December of 2021; but this has now been extended to 31st December 2023. Also, the SEC guidance emphasizes the following:
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Certification in annual or periodic reports, which stipulates that all public companies must file their audited financial statements and periodic reports with the SEC; and the CEO and CFO shall certify all audited financial statements and periodic accounts filed by the company.
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Also, the duty of management is to establish internal controls over a company’s financial reporting and security of its assets, whilst the board of directors must ensure the integrity of the financial controls and reporting.
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A public company’s annual report must contain a report from the management on the annual assessment of the company’s internal control over financial reporting. The report must include disclosure of any material weakness identified by management in the course of its evaluation.
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Duty of auditors to attest to management’s assessment of internal controls over financial reporting. This attestation must form part of the company’s annual report; and
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Any person carrying on the business of auditing a public company must be registered by the commission.
The NASD, therefore, advised all market participants and their respective clients to take the necessary steps to comply with any outstanding requirements of the guidelines.
