Smaller Reporting Companies May Avoid SOX Requirement Auditor Attestation Concerning Internal Controls Under Proposed Legislation

Posted on December 2, 2009 by Jack J. Gravelle

In November the House Financial Services Committee passed an amendment to the proposed Investor Protection Act, H.R. 3817, that would exempt non-accelerated filers from providing auditor attestation of internal control over financial reporting. Public holding companies for some community banks may be affected. If passed, the bill as amended would provide significant relief for smaller reporting companies which are, generally speaking, companies with a public float of less than $75 million.

 
On October 2, 2009, the SEC extended the deadline by which annual reports must include auditor attestation for non-accelerated filers, including smaller reporting companies, to fiscal years ending on or after June 15, 2010. For calendar year-end companies, this would be the Form 10-K for the year ended December 31, 2010, to be filed in March 2011. Previously the deadline applied to annual reports for years ending on or after December 15, 2009. The Commission indicated the deadline will not be extended again, but if the Investor Protection Act becomes law the deadline will become moot. Congress is expected to consider the Investor Protection Act sometime in December.

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