Disclosure Committee Charter - Required? 1312



  • Working for a smaller company in our first year of SOX compliance, we are facing a number of areas where we need to formalize our policies and procedures that were previously informal.
    We have a Disclosure Committee. However. no charter exists. Is this one of those ‘must have’ formal policies?
    Thanks,
    Scott



  • I. protiviti Consulting has a resource that addresses the question directly (protiviti.com).
    Guide to the Sarbanes-Oxley Act: Internal Control Reporting Requirements - Third Edition
    Updated to reflect PCAOB Auditing Standard No. 2
    See Question #190, What is the Role of the Disclosure Committee?
    Key Points:

    • It does not appear that SOX requires a formal Disclosure Committee Charter.
    • If formally developed and adopted, a Disclosure Committee Charter could be used to serve as evidence of a Corporate Governance structure.
    • The protiviti resource cautions that if a Disclosure Committee Charter is developed and adopted, the Committee should conform to it.
      II. The article below further addresses this topic:
      complianceonline.com/cms/cms/offline/ExternalLink.html?externalLink=/Offline/RegulatoryBodies/SEC/RegulatoryBodies0L13_445
      III. Dlet SOX - Small Company Guidance
      It might be helpful to perform an online research for the current proposal for SOX Requirements for Smaller Issuers. I believe the PCAOB has posted a proposal for feedback and the results of which should provide additional guidance for small companies.
      Hope this helps,
      Milan

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