Sarbanes-Oxley Services (404)

The first group of public companies known as accelerated filers have implemented the internal control requirements of the Sarbanes-Oxley legislation. In 2007, management of non-accelerated filers ("NAFs") began making assessments of their company’s internal control over financial reporting. In October 2009, the SEC again delayed the internal control audit requirement for NAFs. As a result, such registrants (for years ending after June 14, 2010) will soon undergo their first integrated audit (under the standards of the Public Company Accounting Oversight Board) of such controls along with their financial statements.

Q Has your company properly evaluated the size, internal effort and cost of achieving compliance?
A For companies in your group, a Financial Executive Survey of CFOs estimated between 1,000 and 2,000 internal/external hours to complete the project. Because of its size, taking on this initiative solely with internal resources can be very disruptive to your company’s operations.

Q Does your company have the internal resources available to manage this process?
A If not, starting early to plan the process has proven to be the best way to proceed. The old saying: “He who hesitates is lost” has proven to be true for some of the accelerated filers who waited too long to initiate this process. As a result of procrastination, many accelerated filers made compliance with Sarbanes-Oxley more painful and costly than it needed to be.

Q Are you aware that just one “material weakness” will yield an adverse internal
   control report?
A An adverse internal control report could lead to negative press and stock price pressures.

Q What will be the extent and timing of your external auditor’s involvement?
A Companies will need to understand the needs, scope and methodologies of their external auditors; however; external auditors are limited (by independence rules) in the extent to which they can share this knowledge.

Q What can your company do to bridge this gap?
A Squar Milner’s dedicated professionals and CPAs serving on Section 404 assignments possess both    audit expertise and consulting backgrounds. As a result, we can better fill the gap between your    external auditors and you.

Squar Milner’s audit background comes from extensive experience documenting and testing internal controls because we serve as auditors for approximately 30 public reporting companies. This experience has now been enhanced as our partners have been involved with accelerated filers in Section 404 assignments and understand what needs to be done to achieve compliance. Squar Milner knows how to achieve compliance with Sarbanes-Oxley Section 404.

For more information, please contact:

Newport Beach
Ernest Miranda