03.17.2009
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Updates
Unless the SEC grants another extension, a non-accelerated filer must provide its first auditor attestation report under Section 404(b) of the Sarbanes-Oxley Act in its SEC annual report for the fiscal year ending on or after December 15, 2009. A "non-accelerated filer" is a company that did not have a public float of $75 million or more on the last business day of its most recently completed second fiscal quarter. New public companies are not required to include the auditor attestation report in their initial SEC annual report.
Section 404 Requires Management Assessment and Auditor Attestation
Section 404 requires that (1) a public company's management perform a formal assessment of the company's internal control over financial reporting, including tests to confirm the design and operating effectiveness of the controls, and include in the company's annual report management's assessment of the effectiveness of the company's internal control over financial reporting and (2) the public company's auditor provide an independent opinion on the internal control structure and attest to management's assessment of the internal control over financial reporting.
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Practical Tip Become familiar with auditing guidance on integrated audits for smaller reporting companies. Audits of internal control over financial reporting must comply with the requirements of Auditing Standard No. 5. Auditing Standard No. 5 establishes requirements and provides direction on performance of an audit of internal control over financial reporting that is integrated with an audit of the company's financial statements. Auditing Standard No. 5 also provides direction on scaling the audit based on a company’s size and complexity. The Public Company Accounting Oversight Board has recently published guidance for auditors of smaller public companies that is intended to help auditors scale their audit for smaller, less complex companies. Executives of these companies may find this guidance helpful in preparing for integrated audits. |
Additional Information
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