Responding to complaints that small issuers have disproportionately high costs that exceed the benefits of internal control attestation, the SEC has expanded size-based exemptions to SOX 404(b) since its initial adoption. Recent changes to the exemption criteria have rekindled the debate over the value of the SOX 404(b) requirement. This paper summarizes the model presented in Levine (2009), describes conditions for overauditing, and suggests solutions for practitioners, their clients, and regulators.
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Research Article| January 22 2021
Do the Benefits of Small Issuer SOX 404(b) Exemptions Outweigh the Costs?
Amanda M. Convery ;
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Amanda M. Convery, Carolyn Levine; Do the Benefits of Small Issuer SOX 404(b) Exemptions Outweigh the Costs?. Current Issues in Auditing 2021; doi: https://doi.org/10.2308/CIIA-2020-026
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