Originally published June 30, 2008
Keywords: SEC, independent auditor, attestation reports, compliance date, financial reporting requirements, Section 404, Sarbanes-Oxley, non-accelerated filer, Regulation S-K,
On June 20, 2008, the Securities and Exchange Commission adopted rules that again defer the compliance date for independent auditor attestation reports with respect to the internal control over financial reporting requirements by non-accelerated filers required by Section 404 of the Sarbanes-Oxley Act of 2002 and the SEC's rules thereunder. Release Nos. 33-8934; 34-58028.
Under the extension, a non-accelerated filer is not required to provide the independent auditor attestation report on management's assessment of internal control over financial reporting (Item 308(b) of Regulation S-K) until after it files an annual report for its first fiscal year ending on or after December 15, 2009. Without this extension, this attestation would first have been required for such filer's first fiscal year ending on or after December 15, 2008.
Until the time that a non-accelerated filer is required to file the independent auditor attestation report, its management's report on the filer's internal control over financial reporting (Item 308T(a) of Regulation S-K) required to be included in annual and quarterly reports will continue to be treated as "furnished" rather than "filed." As a result, management's report will not be subject to liability under Section 18 of the Securities Act of 1933, although it will be subject to liability under Section 10(b) and Rule 10b-5 under the Securities Exchange Act of 1934.
For purposes of determining what filers benefit from the compliance date deferral, a non-accelerated filer is a filer that is not at least an accelerated filer. An accelerated filer is defined in Rule 12b-2 under the Exchange Act as an issuer that:
- Had a worldwide public float of $75 million or more as
calculated as of the last business day of its most recently
completed second fiscal quarter;
- Has been subject to the reporting requirements of the
Securities Exchange Act of 1934 for at least 12 calendar
months;
- Has filed at least one annual report; and
- Is not eligible to use the disclosure requirements
applicable to smaller reporting companies for its quarterly
and annual reports.
A smaller reporting company is defined in Rule 12b-2 under the Exchange Act as an issuer that:
- Had a worldwide public float of less than $75 million as
calculated as of the last business day of its most recently
completed second fiscal quarter;
- In the case of an initial registration statement for
shares of its common equity, had a public float of less than
$75 million as of a date within 30 days of the date of the
filing of a registration statement; or
- In the case of an issuer whose public float was zero as
calculated in accordance with the previous two bullets, had
annual revenues of less than $50 million during the most
recently completed fiscal year for which audited financial
statements are available.
The action taken by the SEC has no impact on public companies that are accelerated filers or large accelerated filers.
If you have any questions about this compliance date deferral, please contact any member of our Corporate & Securities practice.
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