15 U.S.C. § 7261 — Disclosures in periodic reports

Page 2341 TITLE 15—COMMERCE AND TRADE § 7262 SUBCHAPTER IV—ENHANCED FINANCIAL DISCLOSURES § 7261. Disclosures in periodic reports (a) Omitted (b) Commission rules on pro forma figures Not later than 180 days after July 30, 2002, the Commission shall issue final rules providing that pro forma financial information included in any periodic or other report filed with the Com- mission pursuant to the securities laws, or in any public disclosure or press or other release, shall be presented in a manner that— (1) does not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the pro forma financial information, in light of the cir- cumstances under which it is presented, not misleading; and (2) reconciles it with the financial condition and results of operations of the issuer under generally accepted accounting principles. (c) Study and report on special purpose entities (1) Study required The Commission shall, not later than 1 year after the effective date of adoption of off-bal- ance sheet disclosure rules required by section 78m(j) of this title, complete a study of filings by issuers and their disclosures to determine— (A) the extent of off-balance sheet trans- actions, including assets, liabilities, leases, losses, and the use of special purpose enti- ties; and (B) whether generally accepted accounting rules result in financial statements of issuers reflecting the economics of such off- balance sheet transactions to investors in a transparent fashion. (2) Report and recommendations Not later than 6 months after the date of completion of the study required by paragraph (1), the Commission shall submit a report to the President, the Committee on Banking, Housing, and Urban Affairs of the Senate, and the Committee on Financial Services of the House of Representatives, setting forth— (A) the amount or an estimate of the amount of off-balance sheet transactions, in- cluding assets, liabilities, leases, and losses of, and the use of special purpose entities by, issuers filing periodic reports pursuant to section 78m or 78o of this title; (B) the extent to which special purpose en- tities are used to facilitate off-balance sheet transactions; (C) whether generally accepted accounting principles or the rules of the Commission re- sult in financial statements of issuers re- flecting the economics of such transactions to investors in a transparent fashion; (D) whether generally accepted accounting principles specifically result in the consoli- dation of special purpose entities sponsored by an issuer in cases in which the issuer has the majority of the risks and rewards of the special purpose entity; and (E) any recommendations of the Commis- sion for improving the transparency and quality of reporting off-balance sheet trans- actions in the financial statements and dis- closures required to be filed by an issuer with the Commission. (Pub. L. 107–204, title IV, § 401, July 30, 2002, 116 Stat. 785.) Editorial Notes CODIFICATION Section is comprised of section 401 of Pub. L. 107–204. Subsec. (a) of section 401 of Pub. L. 107–204 amended section 78m of this title. § 7262. Management assessment of internal con- trols (a) Rules required The Commission shall prescribe rules requir- ing each annual report required by section 78m(a) or 78o(d) of this title to contain an inter- nal control report, which shall— (1) state the responsibility of management for establishing and maintaining an adequate internal control structure and procedures for financial reporting; and (2) contain an assessment, as of the end of the most recent fiscal year of the issuer, of the effectiveness of the internal control structure and procedures of the issuer for financial re- porting. (b) Internal control evaluation and reporting With respect to the internal control assess- ment required by subsection (a), each registered public accounting firm that prepares or issues the audit report for the issuer, other than an issuer that is an emerging growth company (as defined in section 78c of this title), shall attest to, and report on, the assessment made by the management of the issuer. An attestation made under this subsection shall be made in accord- ance with standards for attestation engage- ments issued or adopted by the Board. Any such attestation shall not be the subject of a separate engagement. (c) Exemption for smaller issuers Subsection (b) shall not apply with respect to any audit report prepared for an issuer that is neither a ‘‘large accelerated filer’’ nor an ‘‘ac- celerated filer’’ as those terms are defined in Rule 12b–2 of the Commission (17 C.F.R. 240.12b–2). (Pub. L. 107–204, title IV, § 404, July 30, 2002, 116 Stat. 789; Pub. L. 111–203, title IX, § 989G(a), July 21, 2010, 124 Stat. 1948; Pub. L. 112–106, title I, § 103, Apr. 5, 2012, 126 Stat. 310.) Editorial Notes AMENDMENTS 2012—Subsec. (b). Pub. L. 112–106 inserted ‘‘, other than an issuer that is an emerging growth company (as defined in section 78c of this title),’’ before ‘‘shall at- test to’’. 2010—Subsec. (c). Pub. L. 111–203 added subsec. (c). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section