What Procedures must the Audit Committee Establish for Handling Whistleblower Accounting Complaints?
The April 9th Final Rules require the audit committee to establish procedures for: (i) the receipt, retention, and treatment of complaints received by the company regarding accounting, internal accounting controls or auditing matters and (ii) the confidential, anonymous submission by employees of the company of concerns regarding questionable accounting or auditing matters. The April 9th Final Rules do not mandate specific procedures that the audit committee must establish in order to implement this requirement. Rather, the SEC recommended that each audit committee develop procedures that work best for each company’s individual circumstances. In this connection, many companies have established hot lines on which employees can leave anonymous messages. The rationale for whistleblower procedures is that the establishment of formal procedures for receiving and handling complaints could serve to facilitate disclosures, encourage proper individual conduct and alert the audit committee to po
