The jobs act created a new category of issuer, called an "Emerging Growth" (ECG) company, in the interest of stimulating equity investment in companies by modifying the regulations surrounding registration, capital-raising activities, and compliance requirements. To qualify for this category, a company must have produced less than 1 billion of revenue in it's prior fiscal year (and must not have sold common equity in a registered offering prior to December 8, 2011). A qualifying company would lose ECG status when one of the following occurs:

• Five years elapse from the IPO date
• Company produces more than 1 billion in gross revenue
• Company issues more than 1 billion in non-convertible debt within a 3-year period
• Company reaches accelerated-filer status (>$700MM public market float)

As an ECG, a company would be exempt from an external audit of their internal controls over financial reporting (SOX 404(b)) as long as they maintain ECG status. This would be a maximum of 5 years from the IPO date if no other conditions specified above are met before that time.

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Tags: Internal Controls, Pre-IPO, 404, SOX, internal control

Tags: Internal Controls, Sarbanes-Oxley Articles & Information, SOX, internal control, Vibato, Internal Control Education

Mitt Romney is suggesting that investors rely on Corporate America to 'do the right thing' and not steal, overstate earnings, lie to line their own pockets, etc. even though this thinking has been proven inaccurate over-and-over again.

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Tags: Internal Controls, SOX, internal control, Sarbanes-Oxley, Internal Control Education

New legislation is gaining steam that would change the definition of which companies are subjected to an external audit review of their internal controls (e.g., Sarbanes-Oxley Section 404(b)). The bill, called 'H.R.3606 - Reopening American Capital Markets to Emerging Growth Companies Act of 2011,' passed the House by an overwhelming bipartisan vote of 54-1. The bill still has to go through the Senate and then get Presidential approval before it becomes law (you can follow the progress here: http://www.opencongress.org/bill/112-h3606/show). 

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Tags: Internal Controls, Sarbanes-Oxley Articles & Information, 404, SOX, AICPA, 404 audit, audit costs, Non-accelerated filer 404(b) information, Sarbanes-Oxley Training, Sarbanes-Oxley, external auditing, Internal Control Education

COSO is coming out with a revision to the famous 'COSO Cube' and they have submitted a draft for public comment. The COSO Cube provides the basis for all internal control infrastructures, including Sarbanes-Oxley implementations, and it gives guidance on how to structure and audit control procedures. PwC participate in the update and they have provided a nice synopsis below of the pending change:

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Tags: Internal Controls, SOX, 404 audit, audit scope, COSO, Internal Control Education