2009-10-02 SOX 404 Deferral for Small Entities

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This newsletter details the SEC's announcement on deferral of the date of compliance with SOX 404 provisions for small companies.

Small public companies to begin providing audited assessment of ICFR in nine months On October 2, 2009, the Securities and Exchange Commission announced a further deferral of the date when the smallest publicly reporting companies will begin complying with the final portion of a key provision of a 2002 corporate governance law that requires companies to report to the public about the effectiveness of their internal control over financial reporting.

Under the provisions of Section 404 of the Sarbanes-Oxley Act, public companies and their independent auditors are each required to report to the public on the effectiveness of a company's internal controls. The smallest public companies with a public float below $75 million have been given extra time to design, implement and document these internal controls before their auditors are required to attest to the effectiveness of these controls.

This extension of time will expire beginning with the annual reports for fiscal years ending on or after June 15, 2010. This expiration date previously had been for fiscal years ending on or after December 15, 2009.
A copy of the SEC press release For a copy of the press release, refer to the SEC website:
http://www.sec.gov/news/press/2009/2009-213.htm
Additional materials The extension was granted so that the SEC's Office of Economic Analysis could complete a study of whether additional guidance provided to company managers and auditors in 2007 was effective in reducing the costs of compliance. Refer to the link below for a copy of this report released in late September.

Study on SOX Internal Controls

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