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9.21 Comptroller General Study Regarding Exemption for Smaller Issuers

<< Title IX Overview

9.21 Changes to and Studies Regarding Section 404(b) of the Sarbanes-Oxley Act



9.21. Changes to and Studies Regarding Section 404(b) of the Sarbanes-Oxley Act.  The Act provides that the auditor attestation requirement of Section 404(b) of the Sarbanes-Oxley Act no longer applies to non-accelerated SEC filers (issuers with less than $75 million in market capitalization).  The SEC had postponed the effectiveness of Section 404(b) for several years, but without this provision non-accelerated filers would be required to include an auditor's attestation report in their annual report filed for a fiscal year ending on or after June 15, 2010.  This will be beneficial to many community banks since it could significantly reduce their costs of being public companies. In addition to the permanent exemption for smaller issuers, the SEC is also directed to report on ways to reduce Section 404(b) compliance costs for companies with public floats between $75 million and $250 million. [§989G]

Within three years of enactment, the Comptroller General is to study the impact of the
amendments made by this Act to section 404(b) of Sarbanes-Oxley, including whether
issuers that are exempt from 404(b) have fewer or more restatements of published
accounting statements than those who are not exempt, how the cost of capital for issuers
compares between those who are exempt and those who are not, and whether there is any
difference in the confidence of investors in the integrity of financial statements of issuers
that are exempt and those who are not.  [§989I]