SEC's Proposed SOX 404(b) Changes: Impact on Public Company Governance

The SEC has proposed significant changes to SOX 404(b) requirements, potentially expanding non-accelerated filer status for many public companies. This shift would reduce the number of companies subject to external auditor attestation for internal controls over financial reporting, placing greater emphasis on management's 404(a) assessment and overall governance responsibilities. Companies should proactively plan for these changes by optimizing SOX programs and reimagining internal audit's role.