By George Wilson


On March 31, 2021, the SEC published two SPAC related statements:


The SEC’s Acting Chief Accountant, Paul Munter, issued a Public Statement titled “Financial Reporting and Auditing Considerations of Companies Merging with SPACs,




The Division of Corporation Finance issued a “Staff Statement on Select Issues Pertaining to Special Purpose Acquisition Companies.”


Here are highlights of the issues addressed in the two pronouncements.


The Chief Accountant’s Statement addressed considerations in several complex areas related to “de-SPACing” transactions:


Market and Timing, 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,


Financial Reporting, including the need for qualified professionals to deal with complex issues frequently found in financial reporting for SPAC related companies,


Internal Control, including both Internal Control Over Financial Reporting and Disclosure Controls and Procedures requirements,


Corporate Governance and Audit Committee issues, with a focus on the need for appropriate board and audit committee oversight after a de-SPACing transaction, and


Auditor matters, in particular the SEC’s requirements for auditor independence as they relate to SPAC transactions.


CorpFin’s Statement focused on:


Shell Company Restrictions, including the requirements for a “Super 8-K” and a reminder that a former shell company will be an “ineligible issuer” for three years following the completion of a business combination,


Books and Records and Internal Control Requirements, with a reminder that after a SPAC related business combination the company will need “the necessary expertise, books and records and internal controls to provide reasonable assurance of timely and reliable financial reporting,” and


Initial Listing Standards of National Securities Exchanges, including reminders about continuing listing and governance requirements.


The issues mentioned above, as well as all the other detailed guidance in both Statements, will be addressed in our April 20 conference, “The SPAC Life Cycle: Business, Legal and Accounting Considerations Forum 2021.”


As always, your thoughts and comments are welcome!

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