News

The Securities and Exchange Commission voted Thursday to exempt smaller public companies with less than $100 million in annual revenue from the requirement for an attestation of their internal control over financial reporting by an outside auditor.

In doing so, the SEC adopted amendments to the definitions of “accelerated filer” and “large accelerated filer” as a way of reducing conpanies’ compliance costs. Outside audits of internal controls are still required under the Sarbanes-Oxley Act of 2002 for larger companies.

Smaller reporting companies with less than $100 million in revenues would still continue to be required to establish and maintain effective internal controls over financial reporting, and their principal executive and financial officers would still be required to continue to certify that, among other things, they are responsible for establishing and maintaining ICFR and have evaluated and reported on the effectiveness of the company’s disclosure controls and procedures. In addition, these smaller companies would still be subject to a financial statement audit by an independent auditor, who is required to consider ICFR in the performance of that audit.