On October 2, the Securities and Exchange Commission announced that the smallest publicly reporting companies will begin complying in nine months with Section 404 of the Sarbanes-Oxley Act. Under the provisions of Section 404 of the Sarbanes-Oxley Act, public companies and their independent auditors are each required to report to the public on the effectiveness of a company’s internal controls. The smallest public companies with a public float below $75 million have been given since 2002 to design, implement and document these internal controls before their auditors are required to attest to the effectiveness of these controls. The SEC will require these companies to comply with Section 404 beginning with the annual reports for fiscal years ending on or after June 15, 2010.
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