NASDAQ Internal Audit Requirement

Written by Sargon Youmara, Partner, Vonya Global

The NASDAQ is making some changes.

Are you ready?

Nasdaq Internal Audit RuleThe NASDAQ has proposed a rule change similar to a rule implemented by the NYSE soon after the enactment of Sarbanes Oxley. The rule requires all companies listed on the NASDAQ as of June 30, 2013 to establish an internal audit function by December 31, 2013. For those not yet listed on the NASDAQ, an internal audit function must be created prior to listing on the exchange.

The proposed internal audit rule includes four key points:

  • Each company must establish and maintain an internal audit function to provide management and the audit committee with ongoing assessments of the company’s risk management processes and system of internal control.
  • The company may choose to outsource the function to a third party service provider other than its independent auditor.
  • The audit committee must meet periodically with the internal auditors and assist the board in its oversight of the function.
  • The audit committee should also discuss with the outside auditor the responsibilities, budget and staffing of the internal audit function.

Given the aggressive timeline associated with the proposed rule change, and the likelihood that it will become a requirement, companies listed on NASDAQ should begin considering how best to comply with the requirements. Should you like additional information please visit the Vonya Global website describing the NASDAQ Internal Audit Rule or contact the author, Sargon Youmara.


This post was contributed by Sargon Youmara, a Partner with Vonya Global. Sargon Youmara has over 15 years of diverse experience in business risk consulting, internal audit and public accounting. He leads various internal audit initiatives and Sarbanes-Oxley projects to a wide-array of companies from start-ups to multi-nationals. Sargon is the Risk and Internal Control knowledge partner to his clients and has a depth of experience in:
– Creating “start-up” Internal Audit Departments
– Evaluating Internal Audit Department Effectiveness
   (QAR and Internal Audit Capability Maturity Model)
– Reducing risk in international operations

If you would like to contact or connect with Sargon directly you can find his profile on LinkedIn: http://www.linkedin.com/in/syoumara.