Blog  •  January 06, 2022

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Domestic Companies Must Comply with Holding Foreign Companies Accountable Act Disclosure Rule

If you are responsible for EDGAR filings at a domestic (U.S.) company, and you think the Holding Foreign Companies Accountable Act Disclosure rule doesn't apply to you — think again!

The title of the act notwithstanding, all companies that file with EDGAR must comply with the rule — including U.S. corporations. Filings will suspend if you don't comply.  

Here's the background: on December 2, 2021, the SEC released a final rule for Holding Foreign Companies Accountable Act disclosure. This rule introduced new requirements for Auditor's information. 

It impacts issuers:

  • that have retained a registered public accounting firm to issue an audit report where the accounting firm has a branch or office located in a foreign jurisdiction; and
  • where the Public Company Accounting Oversight Board (PCAOB) "is unable to inspect or investigate completely because of a position taken by an authority in that jurisdiction."

Further details:

  • All registrants will be required to use the new DEI 2021Q4 taxonomy for any annual report on Forms 10-K, 10-K/A, 20-F, 20-F/A, 40-F and 40-F/A filed for periods after December 15, 2021.​ 
  • The new DEI taxonomy includes three new elements for Auditor's information. Also, disclosure and Inline XBRL tagging of the following items is required for all filers. ​ 
    • Auditor's Name ​ 
    • Auditor's Location (Location represents the city with either or both country, US state or Canadian province)​ Examples: Chicago, IL or Waterloo, ON, Canada​ 
    • Auditor's PCAOB ID Number  
  • The Auditor's name and office location is incorporated in the Public Accountant's Report shown prior to the financial statements included in the report. The Auditor's PCABO ID number is a new item that must be disclosed.​ 
  • Currently, the SEC has no plans to revise the Forms facing page to include the new elements or mandate that the information reside in a specific location in the report.
  • At this time the SEC has not provided guidance on where the information should appear in the document. It is the filers choice. ​ 
  • SEC test and live filing submissions will suspend if the Auditor's information is not included in the iXBRL package.​ 

Additional information can be found via the link here.

DFIN wants to help ensure that our clients manage this new rule without any difficulties. Please reach out to me with any questions.


Marcie Clark

Global Director, EDGAR and Filing Services, DFIN