Conflict Minerals Report (CMR) Audit Cost Reduction Strategies

The Elm Consulting Group, a global health, safety, environmental and sustainability audit and risk management consultancy, published the first in a three part series describing strategies to minimize costs of upcoming Conflict Mineral Report (CMR) audits required under the SEC final conflict minerals regulation for reporting companies using ‘conflict minerals’. They recalled that this audit has the objective of evaluating whether a) a company’s due diligence program conforms to an accepted standard such as the OECD guidance, and b) the company actually implemented the program as designed, rather than the result of whether the minerals are indeed conflict-free. Elm describes on their website (here) that as with any audit, good planning is crucial to success and cost management and that techniques such as representative sampling parameters can have a significant cost reduction impact. Note that while the final SEC Rule specifies the audit objective and standards, many questions exist as to what the audit will involve and both the AICPA and The Auditing Roundtable are developing guidance for CMR auditors in applying the relevant GAO “Yellow Book” standards referenced by SEC.