A final rule
from the SEC includes the exemption for non-accelerated filers from Sarbanes-Oxley Section 404(b), the external auditor's report on internal control.
Contained in the Dodd-Frank Wall Street Reform and Consumer Protection Act
, the exemption is effective immediately for publicly-traded companies with a market capitalization below $75 million.
In issuing the new rule, the SEC stated:
The Commission is adopting amendments to its rules and forms to conform them to new Section 404(c) of the Sarbanes-Oxley Act, as added by Section 989G of the Dodd-Frank Act. Section 404(c) provides that Section 404(b) of the Sarbanes-Oxley Act shall not apply with respect to any audit report prepared for an issuer that is neither an accelerated filer nor a large accelerated filer as defined in Rule 12b-29 under the Exchange Act.10
Non-accelerated filers received numerous extensions from compliance with SOX Section 404(b), until the Dodd-Frank bill finally granted the exemption. The CPA profession largely argued against the exemption, wanting investors for companies of all sizes to receive the same level of internal control assurance.