CSA delays tougher certification requirements
With the IPO window open for many tech firms, here is a timely reminder from our friends at law firm McCarthy Tetrault that being public isn’t the same as being private. The topic is CEO/CFO certification of financial statements and internal controls. Keep in mind GM’s recent admission that they are not comfortable with their own internal financial controls:
CSA Provides Update on Revisions to CEO/CFO Certification Requirements.
The Canadian Securities Administrators recently published a Staff Notice to provide an update on its plans for the proposed effective date of the expansion of the certification requirements of National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings to cover the evaluation of the effectiveness of an issuer’s internal control over financial reporting.
In March 2006, the CSA announced a proposal to expand the Certification Rule to include the following internal control reporting requirements for all reporting issuers (other than investment funds) in all Canadian jurisdictions:
– certification in the annual certificates that the certifying officers have evaluated the effectiveness of the issuer’s internal control over financial reporting as of the end of the financial year; and
– certification that, based on their evaluation, the certifying officers have caused the issuer to disclose in its annual MD&A their conclusions about the effectiveness of internal control over financial reporting.
At that time, the CSA has acknowledged that the process of evaluating the effectiveness of internal control over financial reporting would be a significant undertaking for many issuers and that it intended to allow significant lead time for issuers to plan and implement efficiently the activities required to support the additional certifications and disclosure relating to internal control over financial reporting.
Initially, the CSA indicated that the earliest the proposed revisions to the Certification Rule relating to the evaluation of an issuer’s internal control over financial reporting would apply was in respect of financial years ending on or after December 31, 2007. In the Staff Notice, the CSA now advises that it intends to propose that these requirements apply in respect of financial years ending on or after June 30, 2008.
Insert sigh of relief, here.