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Qualified, experienced BKD client service professionals write the contents of these articles. We urge you to carefully consider all of the facts and circumstances of your situation before applying specific information in our articles. Consult your BKD advisor before acting on any matter covered in these articles.
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July 2010
Financial Reform Bill Includes Sarbanes-Oxley Section 404(b) Exemption
Jennifer George
President Obama signed the financial regulatory reform bill into law July 21. While there are many new provisions in the 2,300-page law, one immediate effect is the permanent exemption of Section 404(b) of the Sarbanes-Oxley Act of 2002 (SOX 404(b)) for issuers with market capitalization of less than $75 million.
The U.S. Securities and Exchange Commission’s (SEC) final deferral of SOX 404(b), which relates to the required auditor’s attestation on internal controls over financial reporting, expired on June 15, 2010, for non-accelerated filers. Therefore, June 30 year-end companies that were previously exempt would have had to comply by the August 16, 2010, deadline for their annual Form 10-K.
During a hearing of the House Financial Services Committee’s Subcommittee on Capital Markets, SEC Chair Mary Schapiro stated that non-accelerated filers with fiscal years ending June 15 through July 21 will not be expected to comply with SOX 404(b).
The legislation does not affect the SOX 404(a) requirement. Companies with public float of less than
$75 million must continue to comply with SOX 404(a), which requires management’s assessment of internal controls over financial reporting.
If you have questions related to your specific situation or how this legislation will affect your institution, contact your BKD advisor.
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