Brian Breheny Julie Gao, and Adrian Deitz are partners at Skadden, Arps, Slate, Meagher & Flom LLP. This post is based on a Skadden memorandum Mr. Breheny, Ms. Gao, Mr. Deitz, James A. McDonald and Pranav L. Trivedi.
There have been significant recent developments in U.S. Securities and Exchange Commission (SEC) regulation of foreign private issuers, (FPIs) including changes that impact the annual report on Form 20-F for fiscal year 2019. Below we discuss some of the recent highlights, as well as recent rulemaking activity by the SEC, the New York Stock Exchange (NYSE) and the Nasdaq Stock Market (Nasdaq) that is relevant to FPIs.
Critical Audit Matters (CAMs)
The requirements for auditors to disclose CAMs in the auditor’s report, based on Public Company Accounting Oversight Board’s (PCAOB) new standard, AS 3101, The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion, will take effect for audits of fiscal years ending on or after (i) June 30, 2019, for large accelerated filers; and (ii) December 15, 2020 for other issuers. Audit reports of “emerging growth companies” are not required to include CAM disclosures.