On October 2, 2009, the Securities and Exchange Commission (“SEC”) approved a six-month extension for “non-accelerated filers” to comply with the Sarbanes-Oxley requirement that they include an attestation and report by their auditors as to the filers’ assessment of the effectiveness of their internal controls over financial reporting (“ICFR”). This extension was the sixth extension approved for non-accelerated filers, and the SEC (and its Chairman, Mary Schapiro) stated that there will be no additional extensions to comply with this requirement. As a result of the October 2 extension, non-accelerated filers will be required to include the auditor’s attestation in their annual reports for fiscal years ending on or after June 15, 2010. Accordingly, SEC reporting companies that will be affected by this final extension should begin planning now to comply with the new requirement.
Section 404 of the Sarbanes-Oxley Act of 2002 requires that public companies include in each annual report filed with the SEC: (i) management’s assessment of the effectiveness of the company’s ICFR; and (ii) an attestation and report by the company’s independent auditor on management’s assessment. The effective dates for these requirements have been delayed several times for non-accelerated filers, and the extension approved on October 2 for the inclusion of the auditor’s attestation does not affect the requirement that companies include management’s assessment of the effectiveness of their ICFR. (Non-accelerated filers have been required to include a management assessment of the effectiveness of their ICFR beginning with fiscal years ended on or after December 15, 2007.)
The term “non-accelerated filer” is not defined in SEC rules, but it is generally refers to a reporting company that had less than $75 million in equity held by non-affiliates of the company as of the last business-law day of its most recently-completed second fiscal quarter.