The Center for Audit Quality (CAQ) submitted a comment letter to the Securities and Exchange Commission (SEC) on its proposal, Enhancement of Emerging Growth Accommodation and Simplification of Filer Status for Reporting Companies.
In the letter, the CAQ expresses support for the SEC’s goal of simplifying filer status requirements and reducing unnecessary regulatory costs, while also encouraging the Commission to carefully consider the potential effects of the proposal on investor protection, financial reporting quality, and confidence in the capital markets.
We share the following views:
- Auditor attestation is an important component of the capital markets ecosystem, and SOX Section 404(b) provides meaningful investor protection benefits.
- Technology-driven complexity increases the need for robust controls and independent oversight.
- We do not support a five-year exemption from SOX 404(b) for newly public companies regardless of size, and believe the proposal extends accommodations too broadly.
- We believe that the objectives of the proposal can be achieved through more targeted and/or alternate reforms.
Read the letter here.