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4810 Consents to the use of audit reports
us SEC - Financial Reporting Manual
4810.1 Registrants must file a copy of the auditor's consent to the use of its audit report or an acknowledgement letter regarding the use of its review report in any filing under the 1933 Act as an exhibit. The primary purpose of obtaining a consent or acknowledgement letter is to assure that the auditor is aware of the use of its report and the context in which it is used.
4810.2 The consent or acknowledgement letter must indicate the date and a conformed EDGAR signature. A manually signed consent or acknowledgement letter must be kept on file by the registrant.
4810.3 A new consent or acknowledgement letter is required:
- Whenever any change, other than typographical, is made to the financial statements;
- For an amendment if there have been intervening events since the prior filing that are material to the company; and
- Prior to the effectiveness of a registration statement if an extended period of time passes since the last filing. An extended time is generally any period which is more than 30 days. (Last updated: 12/31/2010)
4810.4 1934 Act Reports
- Filing of a consent to the use of an audit report (or acknowledgment letter) is not required in 1934 Act reports, other than an annual report on Form 40-F, unless the 1934 Act report is automatically incorporated by reference into a previously filed 1933 Act filing, such as a Form S-3 or Form S-8. In addition, a consent is required in a registration statement on Form 20-F [Item 10.G of 20-F] and in registration statements and annual reports on Form 40-F. (Last updated: 12/31/2010)
- Periodic reports on Forms 10-K and 20-F, and 1934 Act registration statements on Form 10 or Form 20-F must include a signed audit report. The signature must be a conformed EDGAR signature. [S-T 302] The original manually signed report must be kept on file by the registrant.
- Definitive proxy statements that include financial statements must have a manually signed audit report.
- A reissuance of the auditor's report is required when a previously filed 1934 Act filing is amended to include restated financial statements or retrospectively adjusted financial statements.
- A registrant need not file an updated consent on the annual financial statements when the registrant forward incorporates a Form 10-Q into a pre-effective Form S-3. However, the auditor's Section 11 liability extends through the effective date of the registration statement regardless of the inclusion of the updated consent. (Last updated: 9/30/2009)
4810.5 Waivers [Regulation C, Rule 437]
- In rare circumstances, such as situations involving hostile takeover attempts, a consent may be waived if the registrant submits a request to CF-OCA for a waiver and provides an affidavit complying with Rule 437 of Regulation C.
- Hostile takeovers
- A registrant offering its own securities in a hostile exchange offer for a target's stock may seek and not be able to obtain the target's cooperation in providing either its audited financial statements or the target auditor's consent to the use of its report in the required registration statement. The acquirer/registrant should use its best efforts to obtain the target's permission and cooperation for the filing or incorporation by reference of the target's financial statements and the target auditor's consent to the inclusion of its report on the financial statements. At a minimum, a registrant is expected to write to the target requesting these items and to allow a reasonable amount of time for a response prior to effectiveness of the filing.
- If a registrant uses its best efforts but is unsuccessful in obtaining the target's permission and cooperation for the filing or incorporation by reference of its financial statements and its auditor's consent to the inclusion of its report on the financial statements, the registrant may request a waiver of the consent. The affidavit included in the request should document the specific actions taken by the registrant to obtain the cooperation of the other party for the filing as well as the efforts to obtain the auditor's consent. Correspondence evidencing the registrant's request for these items should accompany the affidavit.
- Depending on the facts and circumstances, the staff may agree to waive the requirement to include or incorporate by reference the target auditor's audit report in the event the target is unwilling to cooperate. In that situation, disclosure should be made that, although an audit report was issued on the target's financial statements and is included in the target's filings, the auditor has not permitted use of its report in the registrant's registration statement. The auditor should not be named. Any legal or practical implication for shareholders of the registrant and the target resulting from the inability to obtain the cooperation of the target or consent of the target's auditor should be explained. No disclosure in the registration statement should expressly or implicitly disclaim the registrant's liability for the target's financial statements. In the event that circumstances change, the registration statement should be amended to include the audited financial statements and the auditor's consent required by the form.
4810.6 The consent of the independent accountant is not required for a report on financial statements which is not a part of a 1933 Act registration statement under Rule 412(c) of Regulation C, like superseded financial statements.
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