On March 31, 2021, the SEC published two SPAC related statements:<\/p>\n
The SEC\u2019s Acting Chief Accountant, Paul Munter, issued a Public Statement titled \u201cFinancial Reporting and Auditing Considerations of Companies Merging with SPACs<\/a>,\u201d<\/p>\n and<\/p>\n The Division of Corporation Finance issued a \u201cStaff Statement on Select Issues Pertaining to Special Purpose Acquisition Companies<\/a>.\u201d<\/p>\n Here are highlights of the issues addressed in the two pronouncements.<\/p>\n The Chief Accountant\u2019s Statement<\/a> addressed considerations in several complex areas related to \u201cde-SPACing\u201d transactions:<\/p>\n Market and Timing<\/strong>, including the challenges that can arise from the limited time a SPAC has to identify an acquisition candidate and the pressures this can create for the candidate to meet the reporting requirements for the de-SPACing transaction and subsequent SEC reporting,<\/p>\n Financial Reporting<\/strong>, including the need for qualified professionals to deal with complex issues frequently found in financial reporting for SPAC related companies,<\/p>\n Internal Control<\/strong>, including both Internal Control Over Financial Reporting and Disclosure Controls and Procedures requirements,<\/p>\n Corporate Governance and Audit Committee<\/strong> issues, with a focus on the need for appropriate board and audit committee oversight after a de-SPACing transaction, and<\/p>\n Auditor matters<\/strong>, in particular the SEC\u2019s requirements for auditor independence as they relate to SPAC transactions.<\/p>\n CorpFin\u2019s Statement<\/a> focused on:<\/p>\n Shell Company Restrictions<\/strong>, including the requirements for a \u201cSuper 8-K\u201d and a reminder that a former shell company will be an \u201cineligible issuer\u201d for three years following the completion of a business combination,<\/p>\n Books and Records and Internal Control Requirements<\/strong>, with a reminder that after a SPAC related business combination the company will need \u201cthe necessary expertise, books and records and internal controls to provide reasonable assurance of timely and reliable financial reporting,\u201d and<\/p>\n Initial Listing Standards of National Securities Exchanges<\/strong>, including reminders about continuing listing and governance requirements.<\/p>\n The issues mentioned above, as well as all the other detailed guidance in both Statements, will be addressed in our April 20 conference, \u201cThe SPAC Life Cycle: Business, Legal and Accounting Considerations Forum 2021<\/a>.\u201d<\/p>\n As always, your thoughts and comments are welcome!<\/p>\n","protected":false},"excerpt":{"rendered":" On March 31, 2021, the SEC published two SPAC related statements: The SEC\u2019s Acting Chief Accountant, Paul Munter, issued a Public Statement titled \u201cFinancial Reporting and Auditing Considerations of Companies Merging with SPACs,\u201d and The Division of Corporation Finance issued a \u201cStaff Statement on Select Issues Pertaining to Special Purpose Acquisition Companies.\u201d Here are highlights … Continue reading SPACs in the SEC Spotlight<\/span>