SEC to Consider Expanding Filer Definitions, SOX 404(b) Exemption
The SEC held an open meeting on May 9 to discuss whether to propose long-awaited modifications to filer definitions applicable to accelerated filers and large accelerated filers. The proposed modifications dovetail with the SEC’s changes to the smaller reporting company (SRC) standard (adopted in September 2018), as discussed here, but would also impact the requirement under Section 404(b) of the Sarbanes-Oxley Act for issuers to provide an auditor’s attestation of management’s assessment of internal control over financial reporting.
In particular, the proposed amendments would:
- Exclude from the accelerated and large accelerated filer definitions an issuer that is eligible to be an SRC and had no revenue or annual revenues of less than $100 million in the most recent fiscal year for which audited financial statements are available
- Increase the transition thresholds for accelerated and large accelerated filers becoming a non-accelerated filer from $50 million to $60 million and for exiting large accelerated filer status from $500 million to $560 million
- Add a revenue test to the transition thresholds for exiting both accelerated and large accelerated filer status
Our expanded analysis on the SEC's proposed rules can be viewed here.
For more information on the SEC's proposed amendments, please contact Stephen Quinlivan, Bryan Pitko, Jaclyn Schroeder or the Stinson contact with whom you regularly work.