On September 15, 2010, the Securities and Exchange Commission published a final rule adopting amendments to its rules and forms regarding the inclusion of an auditor attestation report with respect to management's disclosure of internal control over financial reporting in periodic reports. For a copy of the final rule, "Internal Control over Financial Reporting in Exchange Act Periodic Reports of Non-Accelerated Filers," click here. The amendments conform the SEC’s rules and forms to Section 404(c) of the Sarbanes-Oxley Act of 2002, as added by Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The result of the Dodd-Frank Act provision, confirmed by the SEC with the issuance of this final rule, is that the attestation report of a company’s independent auditors as required by Section 404(b) of the Sarbanes-Oxley Act applies only to accelerated filers and large accelerated filers and not to non-accelerated filers. This represents a permanent exemption from the auditor attestation report requirement for these issuers and principally benefits smaller reporting companies.

Before passage of the Dodd-Frank Act, each issuer, other than an investment company, was required by Section 404(b) of the Sarbanes-Oxley Act to include an attestation report issued by its registered public accounting firm related to the annual report disclosure of management’s report on the issuer’s internal control over financial reporting. Non-accelerated filers, primarily smaller reporting companies, were in the final exemption period before this requirement became applicable to them. 

The final rule will be effective immediately upon publication in the Federal Register

All issuers continue to be subject to Section 404(a) of the Sarbanes-Oxley Act, which requires that each annual report include a report by management on the issuer’s internal control over financial reporting.

If you have questions about the SEC's amendments to its rules and forms, please contact Mary J. Mullany, 215.864.8631 or mullany@ballardspahr.com, or any member of Ballard Spahr's Securities Group.


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