SEC concept release on internal control reporting

  • SEC (US Securities and Exchange Commission) (dark gray) Image

12 Jul 2006

The Securities and Exchange Commission, in another step toward improving the implementation of the Sarbanes-Oxley investor protection law, today published a Concept Release as a prelude to its forthcoming guidance for management in assessing a company's internal controls for financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002. The Commission anticipates that the forthcoming guidance for management will cover at least these areas: Identifying risks to financial statement account and disclosure accuracy and the related internal controls that address the risks, including how management might use company-level controls to address the risks Objectives of the evaluation procedures and methods or approaches available to management to gather evidence to support its assessment Factors management should consider to determine the nature, timing, and extent of its evaluation procedures Documentation requirements, including overall objectives of the documentation and factors that might influence documentation requirements The Concept Release seeks feedback on each of these topics and on whether guidance should be provided in other areas as well.

One of the questions the Release asks is whether there are special issues applicable to foreign private issuers that the Commission should consider in developing guidance to management on how to evaluate the effectiveness of a company's internal control over financial reporting. Responses due 60 days after publication in the Federal Register. Click for:

Effective dates of Section 404 for:

Fiscal years ending on or after:

US domestic reporting companies that are accelerated filers

15 November 2004

Foreign private issuers that are accelerated filers

15 July 2006

Domestic and foreign non-accelerated filers

15 July 2007

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