SEC Says No to SOX 404(b) Exemptions

As mandated by the Dodd-Frank Act, the Securities and Exchange Commission studied the question of whether companies with a market cap of $75 million to $250 million should be completely exempted from complying with the Sarbanes-Oxley Act’s Section 404(b). The recently-released SEC report recommends no new exemptions to the Section, which relates to the auditor’s report on internal controls for financial reporting. In addition, the study found that the cost of compliance went down since the implementation of Auditing Standard No. 5.