By Cydney Posner

Surprise! Your company may not need to file a SOX 404(b) internal control attestation by its auditors this year. Companies with stock prices in the dumpster may have the benefit of one ray of sunlight: they may no longer be accelerated filers. A company whose worldwide market value held by non-affiliates falls below $50 million as of the last business day of its second fiscal quarter could exit accelerated filer status for that fiscal year. As a non-accelerated filer, the company is not required to comply with SOX 404(b) in its Form 10-K for that year. See the AICPA discussion document. Unfortunately, the measurement date for calendar year companies is around June 30, which precedes the biggest stock price dives for many companies.

Note that a management report is still required under 404(a), and, based upon the SEC's most recent rulemaking, the ability to omit the auditor attestation will be short-lived: the requirement to include the auditor attestation has been deferred for non-accelerated filers only until years ending on or after December 15, 2009. These filers must include the disclosure specifically referred to in Item 308T of Reg S-K, which explains to readers why the attestation report has not been included.

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