Evolution of SOX 404 Disclosures for EGCs

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A new bill has been introduced with the aim of reducing regulatory burdens for low-revenue issuers. Currently, companies lose their Emerging Growth Company (EGC) status five years after an initial public offering (IPO). In effect, the Fostering Innovation Act of 2019 would extend SOX 404(b) exemption for companies that cease to be an EGC if their average revenue of the last three fiscal years is less than $50 million.

In this article, Audit Analytics analyzes SOX 404 disclosures as the target of those seeking to introduce further regulation leniencies for companies losing their EGC status.

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