6820.1 The report of the independent accountant must comply with all requirements of S-X 2-02.

6820.2 The report of the independent accountant, except for MJDS filers in Canada, should include a statement that the audit was conducted "in accordance with the standards of the Public Company Accounting Oversight Board (United States)." The staff will not object if the report also refers to compliance with home-country applicable professional standards. [Instruction 2 to Item 8.A.2 of Form 20-F]

6820.3 Reports of independent accountants issued for MJDS filers may still refer solely to Canadian GAAS when filed on MJDS forms. [Release No. 33-6902] However, if financial statements of an MJDS filer are included in a non-MJDS form, such as Rule 3-05 financial statements in a domestic registrant's Form 8-K or a foreign private issuer's Form F-3, then the audit must be conducted, at a minimum, in accordance with, and the audit report must refer to, applicable professional standards for non-issuers.

6820.4 The reconciliation to U.S. GAAP must be audited. The staff recommends that the report of the independent accountant refer explicitly to the reconciliation, but the absence of that reference does not relieve the auditor of its responsibility to examine the reconciliation. The reconciliation footnote may not be labeled "unaudited." Pursuant to SEC rules and auditing standards, omission of a material item that is required to reconcile the financial statements to U.S. GAAP pursuant to Item 17 or Item 18 of Form 20-F, or any otherwise inaccurate presentation of that reconciliation, would require a clear reference in the auditor's report identifying the omission or inaccuracy. [Release No. 33-7119]

6820.5 The correction of a material misstatement in a previously filed U.S. GAAP reconciliation should be recognized in the auditor's report through the addition of an explanatory paragraph. [AS 6, paragraph 9] (Last updated: 12/31/2010)

6820.6 The staff expects that there would be no material difference between net income and shareholders' equity amounts reported in a reconciliation to U.S. GAAP and the corresponding amounts that would be reported if the financial statements were presented directly in U.S. GAAP. Accordingly, neither the auditor's report nor the notes to the financial statements should characterize U.S. GAAP net income or shareholders' equity amounts as "estimated" or "approximated." (Last updated: 12/31/2010)

6820.7 If the report includes reference to another accountant, the separate audit report of that accountant must be included. Financial statements of subsidiaries or investees of a foreign private issuer are sometimes prepared in differing GAAPs than that of the registrant. The audit report should be clear as to which auditor is taking responsibility for auditing the conversion of the GAAP of the subsidiary or investee to the GAAP of the issuer, as well as auditing the U.S. GAAP reconciliation.

6820.8 Some foreign private issuers or acquired foreign businesses are jointly audited by more than one firm. Both auditors sign the report and take full responsibility for the audit. Each auditor must comply with all requirements of S-X 2-01, including the U.S. independence requirements. In certain cases, one of the firms may be a U.S. firm.