SEC Postpones Filing Deadline for "404" Internal Control Reports for Smaller Capitalization Accelerated Filers

The SEC has delayed the phase-in of management's annual report and auditor attestation in upcoming 10-Ks for accelerated filers¹with market capitalization of less than $700 million. These accelerated filers will now have up to an additional 45 days to file an amendment to include in their 10-Ks management's report on internal control over financial reporting and the auditor's "attest" report on management's assessment of internal control over financial reporting.

The SEC exemptive order (Release No. 34-50754) indicates that the SEC "has become increasingly concerned that many smaller accelerated filers may not be in a position to meet" the upcoming deadline required by rules under Section 404 of the Sarbanes-Oxley Act of 2002. Under that deadline, all accelerated filers with fiscal years ending on or after November 15, 2004 would have been required in their Form 10-K annual reports to include both a management report and auditor attestation report regarding the