(a) Each registered public accounting firm that performs for an audit client that is an issuer (as defined in section 10A(f) of the Securities Exchange Act of 1934 (15 U.S.C. 78j-1(f))), other than an issuer that is an Asset-Backed Issuer as defined in Sec. 229.1101 of this chapter, or an investment company registered under section 8 of the Investment Company Act of 1940 (15 U.S.C. 80a-8), other than a unit investment trust as defined by section 4(2) of the Investment Company Act of 1940 (15 U.S.C. 80a-4(2)), any audit required under the securities laws shall report, prior to the filing of such audit report with the Commission (or in the case of a registered investment company, annually, and if the annual communication is not within 90 days prior to the filing, provide an update, in the 90 day period prior to the filing, of any changes to the previously reported information), to the audit committee of the issuer or registered investment company:
(1) All critical accounting policies and practices to be used;
(2) All alternative treatments within Generally Accepted Accounting Principles for policies and practices related to material items that have been discussed with management of the issuer or registered investment company, including:
(i) Ramifications of the use of such alternative disclosures and treatments; and
(ii) The treatment preferred by the registered public accounting firm;
(3) Other material written communications between the registered public accounting firm and the management of the issuer or registered investment company, such as any management letter or schedule of unadjusted differences;
(4) If the audit client is an investment company, all non-audit services provided to any entity in an investment company complex, as defined in Sec. 210.2-01 (f)(14), that were not pre-approved by the registered investment company's audit committee pursuant to Sec. 210.2-01 (c)(7).
(b) [Reserved] [68 FR 6048, Feb. 5, 2003, as amended at 70 FR 1593, Jan. 7, 2005]
General Instructions as to Financial Statements
Source: Sections 210.3-01 through 210.3-16 appear at 45 FR 63687, Sept. 25, 1980, unless otherwise noted.
Note: These instructions specify the balance sheets and statements of income and cash flows to be included in disclosure documents prepared in accordance with Regulation S-X. Other portions of Regulation S-X govern the examination, form and content of such financial statements, including the basis of consolidation and the schedules to be filed. The financial statements described below shall be audited unless otherwise indicated.
For filings under the Securities Act of 1933, attention is directed to Sec. 230.411(b) regarding incorporation by reference to financial statements and to section 10(a)(3) of the Act regarding information required in the prospectus.
For filings under the Securities Exchange Act of 1934, attention is directed to Sec. 240.12b-23 regarding incorporation by reference and Sec. 240.12b-36 regarding use of financial statements filed under other acts. [45 FR 63687, Sept. 25, 1980, as amended at 57 FR 45292, Oct. 1, 1992]