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The information in this BKD Alert, published by BKD, LLP, one of the 10 largest CPA and advisory firms in the country, is a brief summary and may not include all details relevant to your situation. It is not intended to provide consulting advice and should not be relied on for that purpose. For a more complete discussion of this issue, contact your BKD advisor.
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October 2009
U.S. Securities and Exchange Commission announces further
deferral of Section 404(b) of the Sarbanes-Oxley Act of 2002
Jennifer Payden George
The U.S. Securities and Exchange Commission (SEC) announced October 2 the further deferral of Rule 404(b) for nonaccelerated filers (generally, companies with a public float below $75 million) to fiscal years ending on or after June 15, 2010.
The SEC’s Office of Economic Analysis recently studied whether additional guidance provided in 2007 to company managers and auditors was effective in reducing compliance costs. Because the study published fewer than three months before the December 15 deadline, it became clear additional time is appropriate. Small public companies and auditors need that time to better plan and prepare for required auditor attestation.
Without this extension, nonaccelerated filers with a calendar year-end would have had to comply with the SEC’s internal control audit requirements beginning with their December 31, 2009, fiscal year-end reports. Under the final extension, they are not required to comply until fiscal year-end annual reports of December 31, 2010.
The extension does not apply to the SEC’s corresponding management reporting requirements that became effective for smaller companies for years ending on or after December 15, 2007. The final extension applies only to SEC’s internal control audit requirements, and does not affect the internal control transition schedule for newly public companies.
SEC Commissioner Luis A. Aguilar and Chair Mary L. Schapiro both remarked in separate statements there will be no further extensions of the compliance deadline.
For a copy of the SEC’s press releases, click the links below:
SEC’s full announcement of the deferral
http://www.sec.gov/news/press/2009/2009-213.htm
Commissioner Luis A. Aguilar Press Release Statement
http://www.sec.gov/news/speech/2009/spch100209laa.htm
Study of the Sarbanes-Oxley Act of 2002 Section 404
http://www.sec.gov/news/studies/2009/sox-404_study.pdf
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