The Audit Committee Council (ACC), an independent advisory committee of the Center for Audit Quality, submitted a comment letter to the Securities and Exchange Commission (SEC) in response to its Proposed Rule on Enhancement of EGC Accommodations and Simplification of Filer Status for Reporting Companies, File Number S7-2026-18.
The ACC supports the Commission’s objective of simplifying filer status requirements and reducing unnecessary regulatory burden. At the same time, we believe the Proposal, as drafted, may extend accommodations too broadly and could reduce the reliability, comparability, and transparency of information available to investors. From our perspective as audit committee members, effective ICFR and independent auditor attestation are important components of investor protection and board oversight, particularly as companies grow in size, complexity, and market significance.
Key points included in the ACC letter are:
- SOX Section 404(b) is an important investor protection.
- The proposed threshold increase is too broad.
- We suggest eliminating the five-year seasoning threshold for LAF status.
- There are additional actions that can reduce burdens on existing public companies, including updating management guidance and modernizing PCAOB inspections.
Read the full comment letter here.