Conflict minerals: IPSA considerations

Comparing the attestation engagement and performance audit

On August 22, 2012, the SEC approved a final rule implementing Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Final Rule”) to require registrants with conflict minerals that are necessary to the functionality or production of their products to report annually on Form SD (which stands for “special disclosures”) a description of the measures they took to exercise due diligence on the source and chain of custody of conflict minerals. In certain situations, a registrant may be required to include, as an exhibit to its Form SD, a Conflict Minerals Report (CMR), which provides expanded disclosures. If an IPSA is obtained, either an examination attestation engagement or a performance audit is permitted. Registrants should consult with their SEC counsel to determine whether and when an IPSA is required.

The purpose of the IPSA is to express an opinion or conclusion as to (1) whether the design of the registrant’s due diligence framework as set forth in the CMR, with respect to the period covered by the report, is in conformity with, in all material respects, the criteria set forth in the nationally or internationally recognized due diligence framework used by the registrant, and (2) whether the registrant’s description of the due diligence measures it performed as set forth in the CMR, with respect to the period covered by the report, is consistent with the due diligence process that the registrant undertook.

This document provides a comparison of an examination attestation engagement and a performance audit under GAGAS and is intended to clarify the differences between such engagements.

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