Sarbanes-Oxley Reprieve for Non-Accelerated Filers: The clock is ticking….

Posted by Teresa Bockwoldt on February 24, 2010

Here is the Sarbanes-Oxley non-accelerated filer reprieve reality for fiscal filers with yearend dates between June 15 and December 31.  Your auditors are going to expect you to provide them with at least two quarters worth of functioning controls data.  They will also expect to be able to go back in time to randomly test at least two quarters worth of data (so just because you give them your test work does not mean that is all they will ask you for. They will ask for other samples in an attempt to uncover any attempts by you to give them only clean examples and they will watch you pull the samples to ensure you do not have the opportunity to fix problems prior to handing over the documentation). 

The legislation states that the controls must be working as of the last day of the fiscal year but I have never seen that honored by an auditor with the small exception of some IT access controls.   What this means is that generally speaking, your controls will need to be function for the following amount of time:

Control Frequency

Functioning Time

Samples Needed

IT Control

As of last day of the year



As of last day of the year



As of last day of the year



At least the last two quarters of the year

2 sometimes 3 if you use PwC


1 quarter

3 sometimes up to 5 if you use PwC


At least the last 4 months

4 - 7 samples


At least the last 3 months

5-13 samples


At least the last month

20-25 samples

More than daily

At least the last month

25-35 samples

Long story short, if you are holding out hope for the permanent non-accelerated filer reprieve and have a fiscal year-end of June 30 for instance and have not started this work - you could be setting yourself up for disaster.  Especially if you have signed your 302 certifications and indicated in your 10K/Q that you had a clean internal control infrastructure (which would be fraud by the way).   This is not something to mess around with.  We have options to get you compliant for as low as $5,590 and completed in less than 1 day - why risk your reputation, your company's stock value, and the potential for a shareholder lawsuit and/or jail for such a small amount of money and effort?  CALL US AT 1-888-4VIBATO!!

Tags: Compliance tools, audit costs, Non-accelerated filer 404(b) information