SEC proposes to redefine 'accelerated filer' and 'large accelerated filer'
The SEC proposed revising the accelerated and large accelerated filer definitions to exclude issuers that are both eligible to be a smaller reporting company (SRC) and have less than $100 million in annual revenues. The amendments would exempt more SRCs from compliance with the auditor attestation of internal controls requirements.
Release No. 34-85814; File No. S7-06-19
- Comments are due July 29, 2019
The proposed amendments would:
- exclude from the accelerated filer and large accelerated filer definitions an issuer that is eligible to be a smaller reporting company (SRC) and has either no revenues or annual revenues less than $100 million
- increase the transition thresholds from:
- $500 million to $560 million to exit large accelerated filer status
- $50 million to $60 million to become a non-accelerated filer
- add a revenue test to the transition thresholds for exiting both accelerated and large accelerated filer status
SRCs with less than $100 million in revenues would no longer be subject to Section 404(b) of the Sarbanes-Oxley Act and therefore would not be required to obtain an attestation of their internal controls over financial reporting (ICFR) from an independent auditor
- The amendments would not change other SOX requirements such as those related to independent audit committees, CEO and CFO certifications of financial reporting, or the requirement to establish, maintain and assess the effectiveness of ICFR
- These issuers also would not be subject to the accelerated or large accelerated filing deadlines for annual and quarterly reports
KPMG's Defining Issues: SEC rule exempts more issuers from ICFR audits