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Conflict Minerals

Independent private sector audit considerations


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On August 22, 2012, the SEC approved a final rule implementing Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Conflict Minerals Rule”) to require issuers to annually disclose a description of the measures they took to exercise due diligence on the source and chain of custody of conflict minerals. If the issuer’s conflict minerals originated in the covered countries but did not finance or benefit armed groups or are classified as Not Been Found to be DRC Conflict Free (i.e., when an issuer’s products might have conflict minerals that originated from covered countries and the minerals may have helped finance or benefit armed groups), the issuer must obtain an independent private sector audit (IPSA) in accordance with generally accepted government auditing standards (GAGAS). Either an examination attestation engagement or a performance audit is permitted.

The purpose of the IPSA is to express an opinion or conclusion as to (1) whether the design of the issuer’s due diligence framework as set forth in the Conflict Minerals Report, with respect to the period covered by the report, is in conformity with, in all material respects, the criteria set forth in the nationally or internationally recognized due diligence framework used by the issuer, and (2) whether the issuer’s description of the due diligence measures it performed as set forth in the Conflict Minerals Report, with respect to the period covered by the report, is consistent with the due diligence process that the issuer undertook.

This document provides a comparison of an examination attestation engagement and a performance audit under GAGAS and is intended to clarify the differences between such engagements.

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