The Securities and Exchange Commission is seeking comments on a request by Nasdaq for a rule change that will require its listed companies to establish and maintain an internal audit function.
The requirement, as detailed in a notice of proposed rulemaking, is intended to ensure that listed companies have a mechanism in place to regularly review and assess internal controls, identify weaknesses, and develop appropriate remedial measures, as well as making sure “that management and the audit committee are provided with ongoing information about risk management processes.” The company may choose to outsource the function to a third party service provider other than its independent auditor.
