Advertisement

April 24, 2014

NASDAQ Proposes Internal Audit Function Requirement for Listed Issuers

On March 4, the Securities and Exchange Commission published notice that The NASDAQ Stock Market LLC (NASDAQ) had filed a proposed new rule that would require each NASDAQ-listed issuer to maintain an internal audit function. The internal audit function would be tasked with providing the issuer’s management and audit committees with an ongoing assessment of the issuer’s risk management processes and system of internal control. Under the proposed rule, an issuer would be permitted to outsource the internal audit function to any third party other than its independent auditor. Additionally, the audit committee would be required to meet periodically with the persons performing the internal audit function and should discuss the role of the internal audit function with the issuer’s outside auditors.

NASDAQ stated in its rule proposal that the purpose of the new rule is to ensure that a listed issuer has a mechanism in place to regularly review and assess its system of internal control, and to ensure that the listed issuer’s management and audit committees are provided with current information about risk management processes and systems of internal control. Additionally, NASDAQ believes that the rule will assist listed issuers in complying with their federal securities law obligations to maintain and evaluate, with the participation of their principal executive and financial officers, the effectiveness of the internal control over financial reporting.

Under its proposal, an issuer that is listed on NASDAQ on or before June 30, 2013 would be required to establish an internal audit function no later than December 31, 2013. An issuer that becomes listed after June 30, 2013 would be required to establish an internal audit function prior to listing on NASDAQ.

Read more.

©2014 Katten Muchin Rosenman LLP

About the Author

Mark D. Wood, Energy Attorney, Katten Muchin Law firm
Partner

Mark D. Wood is head of Katten's Securities practice and concentrates in corporate and securities law. Mark represents public companies, issuers and investment banks in initial public offerings (IPOs) and other public offerings, private investment in public equity (PIPE) transactions, debt securities and other securities matters.

312-902-5493

About the Author

David S. Kravitz, Corporate Attorney, Katten Muchin Law firm
Associate

David S. Kravitz concentrates his practice in corporate matters.

212-940-6354

Boost: AJAX core statistics

Legal Disclaimer

You are responsible for reading, understanding and agreeing to the National Law Review's (NLR’s) and the National Law Forum LLC's  Terms of Use and Privacy Policy before using the National Law Review website. The National Law Review is a free to use, no-log in database of legal and business articles. The content and links on www.NatLawReview.com are intended for general information purposes only. Any legal analysis, legislative updates or other content and links should not be construed as legal or professional advice or a substitute for such advice. No attorney-client or confidential relationship is formed by the transmission of information between you and the National Law Review website or any of the law firms, attorneys or other professionals or organizations who include content on the National Law Review website. If you require legal or professional advice, kindly contact an attorney or other suitable professional advisor.  

Some states have laws and ethical rules regarding solicitation and advertisement practices by attorneys and/or other professionals. The National Law Review is not a law firm nor is www.NatLawReview.com  intended to be  a referral service for attorneys and/or other professionals. The NLR does not wish, nor does it intend, to solicit the business of anyone or to refer anyone to an attorney or other professional.  NLR does not answer legal questions nor will we refer you to an attorney or other professional if you request such information from us. 

Under certain state laws the following statements may be required on this website and we have included them in order to be in full compliance with these rules. The choice of a lawyer or other professional is an important decision and should not be based solely upon advertisements. Attorney Advertising Notice: Prior results do not guarantee a similar outcome. Statement in compliance with Texas Rules of Professional Conduct. Unless otherwise noted, attorneys are not certified by the Texas Board of Legal Specialization, nor can NLR attest to the accuracy of any notation of Legal Specialization or other Professional Credentials.

The National Law Review - National Law Forum LLC 4700 Gilbert Ave. Suite 47 #230 Western Springs, IL 60558  Telephone  (708) 357-3317 If you would ike to contact us via email please click here.