SEC Extends SOX 404 Compliance Dates

By: Cydney Posner

The SEC has adopted an extension proposed in August to further postpone the date by which smaller public companies must comply with SOX 404. Previously, non-accelerated filers were required to comply with SOX 404 in its entirety in their annual reports for fiscal years ending on or after July 15, 2007. The SEC has extended the date so that a non-accelerated filer must provide management's assessment regarding internal control in its annual reports for fiscal years ending on or after December 15, 2007, but will not need to comply with the auditor attestation requirement until its annual reports filed for fiscal years ending on or after December 15, 2008. For press release, click here. For additional materials: Final Rule Release No. 33-8760.

The SEC has also approved relief for all newly public companies by providing a transition period that permits them to omit compliance with SOX 404 in the first annual report that they file after becoming Exchange Act reporting companies. The transition period applies to a company that has become public through an IPO (equity or debt) or a registered exchange offer or that otherwise has become subject to the Exchange Act reporting requirements. It also includes a foreign private issuer that is listing on a U.S. exchange for the first time.

See the SEC's chart below, which summarizes the revised compliance dates.

(dollar amounts refer to the worldwide market value of outstanding voting and non-voting common equity held by non-affiliates):