Sarbanes-Oxley Compliance for Non-Accelerated Filers: The Clock is Ticking!

Posted by Teresa Bockwoldt on March 12, 2010

The Clock is Ticking!

SOX 404(b) deadline is June 15, 2010

As many non-accelerated filers impatiently await the results of legislative activity or another SEC reprieve, the clock keeps ticking for 404(b) compliance. Your auditors are going to expect you to provide them with at least two quarters worth of functioning controls data for your year-end filings after June 15. 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. If your year-end is June 30, you only have two weeks to get started! 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 we have never seen that accepted 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 functioning for the following amount of time:

Control Frequency

Functioning Time

Samples Needed


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.  To avoid this potential pitfall, we have options to get you compliant for as low as $5,590 and implemented in less than 1 day. Is it really worthwhile to risk your reputation, your company's stock value, and the potential for a qualified opinion for the limited cost and effort to get this work done?

We would be happy to speak to you about your compliance needs and how to get you quickly and cost-effectively compliant.

Tags: Non-accelerated filer 404(b) information, Sarbanes-Oxley