Small public companies, also known as “non-accelerated filers,” have been facing for a long time the costs of compliance with Sarbanes-Oxley (SOX) Section 404(b)’s requirement for the external auditor to report on the adequacy of the company’s internal control over financial reporting. Over a year ago, in June 2008, the SEC announced that the 404(b) requirement for small companies was being extended to fiscal years ending on or after Dec. 15, 2009, as a cost-benefit study of compliance costs for small businesses was completed.

In case you missed it … on October 2, 2009, the SEC once again delayed the timing for compliance with 404(b). This time, the delay is only for nine months. And it sounds like this time the SEC means for this to be the last delay.

For those of you who missed the announcement, here is an excerpt from the SEC’s press release:

“Under the provisions of Section 404 of the Sarbanes-Oxley Act, public companies and their independent auditors are each required to report to the public on the effectiveness of a company’s internal controls. The smallest public companies with a public float below $75 million have been given extra time to design, implement, and document these internal controls before their auditors are required to attest to the effectiveness of these controls.

“This extension of time will expire beginning with the annual reports of companies with fiscal years ending on or after June 15, 2010. This expiration date previously had been for fiscal years ending on or after Dec. 15, 2009. The extension was granted so that the SEC’s Office of Economic Analysis could complete a study of whether additional guidance provided to company managers and auditors in 2007 was effective in reducing the costs of compliance. Because the study was published less than three months before the December 15 deadline, the Commission determined that additional time is appropriate and reasonable so that small public companies and their auditors can better plan for the required auditor attestation.

“While the reporting and auditor-attestation grew out of the 2002 law passed by Congress, all U.S. public companies have been required to maintain internal accounting controls since 1977.

“’Since there will be no further Commission extensions, it is important for all public companies and their auditors to act with deliberate speed to move toward full Section 404 compliance,’ said SEC Chairman Mary L. Schapiro.”

So, if you are one of the “non-accelerated” … are you getting ready now? Like it or not, it might be time to take stock of where you are in your SOX compliance efforts. ###