How to maintain independence when auditing a conflict minerals report


An auditor of an SEC issuer’s financial statements is not precluded from performing an independent private-sector audit of that client’s conflict minerals report, according to nonauthoritative guidance prepared by an AICPA task force.

Seven new questions and answers the AICPA has issued on its Conflict Minerals Resources webpage provide nonauthoritative guidance on independence issues related to performing—or considering whether to accept an engagement to perform—an independent private-sector audit of a client’s conflict minerals report.

The SEC enacted the conflict minerals rule last year in fulfillment of a provision in the Dodd-Frank Wall Street Reform and Consumer Protection Act, P.L. 111-203. The rule requires company conflict minerals reports to be audited by an independent auditor.

These audits can be examination attestation engagements performed by a CPA, or performance audits that do not necessarily have to be performed by a CPA.

According to the AICPA’s Q&As on independence:

  • When an auditor considers whether to accept an engagement to audit a company’s conflict minerals report, the independence requirements of the U.S. Government Accountability Office (GAO) apply. The AICPA independence requirements relevant to an examination attestation examination also apply.
  • The GAO’s independence requirements are the same whether a firm performs an examination attestation engagement or a performance audit of the conflict minerals report.
  • If a firm is auditing an issuer’s financial statements but is not auditing that client’s conflict minerals report, the firm should already be complying with SEC and PCAOB independence rules and must continue to do so with regard to conflict minerals-related nonaudit services.

Additional, expanded guidance is provided in the Q&As. In addition, a flowchart that accompanies the Q&As depicts the process of considering what mix of conflict minerals-related services can be provided to an issuer client. A matrix also is provided to show illustrative services and whether the mix of services is permissible or prohibited from an independence perspective.

The Conflict Minerals Resources webpage includes background and other useful information about the use of conflict minerals, as well as an expanded “Useful Links” section.
Ken Tysiac ( ) is a JofA senior editor.


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