www.DFCMAudit.com  is a resource for companies considering the independent private sector audit (IPSA) of the due diligence process required by Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank” or "Dodd-Frank Conflict Minerals" (DFCM)). The fourth year of filings are about done.  There are uncertainties about the SEC Rule and future regulatory requirements – in the U.S. and in the European Union.  Many customers show no sign of easing up their expectations of a conflict-free supply chain.  DFCMAudit.com can be your resource for IPSA-related matters.

There are two objectives to an IPSA.  One addresses the consistency of a program’s design with that of an internationally-recognized framework.  The other requires the auditor to get comfort that, for the portion of the submittal to the SEC, the company actually did what they said they did.  This construct is simple.  It is also easily adaptable for other purposes.   With the increasing focus on useful disclosures of non-financial information in SEC filings ]notably, as promoted by the Sustainability Accounting Standards Board (SASB)], the IPSA offers a precedent for assurance to investors and other key stakeholders.   

The obligatory caveats:    We are not attorneys, financial auditors, or regulators.  The answers and opinions here are our own.  They may differ from other opinions – and, because DFCM is still a new issue, some of them will.  This information is not provided as legal advice.  Readers should conduct their own research, discuss matters with their own resources, and make their own decisions. 

About Section 1502:

Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) dealt with conflict minerals from the Democratic Republic of Congo (DRC) and neighboring countries (“Covered Countries”).   The Securities and Exchange Commission (SEC) proposed a rule on December 15, 2010, and accepted comments in two comment periods.  SEC promulgated the final rule on August 22, 2012.   The rule takes effect for calendar year 2013 for companies that file statements with the SEC (“filers”).  The DFCM final rule requires an Indpendent Private Sector Audit if filers determine that their products contain conflict minerals (tin, tantalum, tungsten or gold, or “3T&G”) from a covered country.   There have been dozens of conferences, webinars, white papers, and articles written about Dodd-Frank Conflict Minerals (DFCM).  Readers are encouraged to view these and become familiar with the rule, terminology, available due diligence frameworks, trade association activities, and other aspects of DFCM.   

 

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