In this episode Matt Kelly and myself take a deep dive into SOX 404(b), what it requires and how companies comply with the reporting requirements set out in this statute. We consider the recent announcements from Congressman Jeb Hensarling to amend this section to exempt companies under the $500MM who wish to go public from its reporting requirements. We consider the corporate and audit response currently in place for 404(b) and how this response is now well embedded in not only corporate controls but also in reporting. We discuss the importance of internal controls over the time frame since the enactment of SOX and how any change may not be well received by institutional investors and private equity funders.

For a more detailed discussion, see Matt’s blog post entitled, “Tale of Sound & Fury: The 404(b) Debate”.

Congress has said it wants to raise the exemption on SOX 404(b) reporting. Does that really mean anything?

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