Done a bit of digging.....perhaps this can assist with the *connection of blue, red quantum dots*?

q

http://en.allexperts.com/q/Canadian-Stocks-1073/Canadian-Stock-U-S.htm

Rafeeya, there are several issues at work here regarding US registrations for Canadian companies, but I think the trend overall is that more Canadian companies are obtaining US registrations. Right now you may be seeing a small dip in companies becoming registered, but I think it is largely because of misconceptions and misunderstandings regarding Sarbanes-Oxley, but which the SEC and PCAOBUS have recently addressed and all of which should be cleared up very soon.

Keep in mind that most Canadian companies that register in the US do so as “foreign private issuers”. As such, they register using a 20-F or 40-F registration statement, file all other information, including interim financial statements, under the Form 6-K, and are exempt from many regulations that domestic US companies have to comply with. A US registration for a Canadian company is actually a fantastic deal – access to the biggest investment market in the world and all the benefits without most of the paperwork and cost. They even get to continue using Canadian GAAP and only have to prepare a single US GAAP reconciliation note which they tack on to the annual report. For most Canadian companies, particularly smaller companies in need of investor exposure, it is almost a no-brainer to obtain and maintain a US registration. The benefits are huge.

What we are seeing now, however, is uncertainty. Uncertainty over the Sarbanes-Oxley Section 404 requirements which are coming into effect. Unfortunately, this uncertainly is completely unfounded and unnecessary. And, from speaking with my Canadian clients, that uncertainty is mostly coming from your end – Canadian auditors. Some Canadian CA’s are throwing out outrageous numbers for what it will cost to comply with Section 404 (internal control over financial reporting), all of which is ridiculous, because they don’t understand the new regulations and what they actually entail and require.

I don’t know if you are aware of it, but the SEC and PCAOBUS enacted new regulations for Section 404 at the end of May, all of which is designed to reduce the regulatory burden on companies and reduce the time and cost to comply. This regulation takes burden of compliance from the auditor and back onto company management where it belongs. For smaller public companies, the ones most scared by Section 404, yet the companies who have the most to gain from a US registration, the added cost to comply will be minimal – as long as Canadian auditors understand and follow the new regulations. The PCAOBUS also stated that they will adjust its inspection program to ensure the new regulations are being followed, and that should include making sure clients are not overcharged. They will be issuing tailored guidance for smaller public companies and their auditors shortly. This information will go a long way to dispelling the prevailing myths about Section 404, and once it does, I expect US registrations of foreign companies to quickly increase because the benefits of a US registration far outweigh the costs, especially for smaller companies.

If there is one thing you and the CICA can do, it is to help your members are familiar with the US regulations and are HONEST ABOUT THE COSTS! I, as well as the SEC and PCAOBUS, are very frustrated by CA’s who tell clients that Section 404 costs will at least quadruple their audit costs. It is simply not true. I don’t know if they are telling them this untruth on purpose, or are just doing it out of ignorance. I work with a lot of smaller Canadian companies, and most of their auditors understand the situation and know that, thanks to the new regulations, Section 404 is now pretty much a non-issue and the added cost is minimal. But there are some CA’s that are continuing to spread these myths about huge new costs, and it needs to stop.