Once a private company completes its going public transaction using a Form S-1 registration statement, it becomes subject to the reporting requirements of the Securities Exchange Act of 1934 (the “Exchange Act”) . Rules 13(a)-13 and 15(d)-13, require that SEC reporting issuers file a Form 10-Q for each of the first three quarters of each fiscal year and that its auditor review the report.
Rules 8-03 and 10-01(d) of Regulation S-X require that a company‘s interim financial statements contained within its Form 10-Q reports be reviewed by its independent auditors in accordance with the Statement on Auditing Standards (“SAS”) prior to the filing of its Form 10-Q with the SEC.
When a company completes its quarterly report on Form 10-Q but its auditor cannot or will not complete its review in a timely manner, the issuer is presented with a dilemma. Absent an auditor review, if it files its 10-Q with the SEC, the filing is considered incomplete and not timely filed. Even though a company is not obliged to state that the timely interim auditor review was completed, the filing of the report implies that the requirements of Form 10-Q have been met, including the review.
A company may decide to file its Form 10-Q by the original or extended filing date without its auditor’s review. In such circumstances, the company must explicitly disclose that the filing is incomplete because Form 10-Q’s required auditor SAS 100 review was not performed and/or completed. Additionally, the company should explain the reason the SAS 100 review was not performed and/or completed and offer an anticipated completion date.
Once the auditor’s SAS 100 review is ready, the company should file an amendment to its Form 10-Q, reflecting that fact. The issuer should include the report of the SAS 100 review in its amended 10-Q report.
For more information about Form 10-Q please see our blog post at:
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