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On March 12, 2020, the SEC adopted amendments to the definitions of “accelerated filer” and “large accelerated filer.” The amendments exclude from these definitions smaller reporting companies with annual revenues of less than $100 million, and increase the transition thresholds for becoming a non-accelerated filer and exiting large accelerated filer status.

However, the most significant effect of the change is arguably that smaller issuers will no longer be required to obtain independent auditor attestation of internal control over financial reporting, or ICFR. Auditor attestation of ICFR is a costly and cumbersome process, and smaller issuers have long sought this type of exemption. The investor community has objected to any relaxation of auditor attestation, ostensibly because it believes smaller issuers are precisely the companies that need such attestation.

CEOs and CFOs will still be required to certify that they are responsible for establishing and maintaining ICFR and have evaluated and reported on the effectiveness of disclosure controls and procedures. And independent auditors will still be required to consider ICFR in the performance of financial statement audits.

The amendments will take effect 30 days following publication in the Federal Register.

Further details on the amendments will be available shortly in The Securities Edge, our securities and corporate governance blog. If you have any questions in the meantime, please contact Gunster securities law and corporate governance practice leader Bob Lamm.

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This publication is for general information only. It is not legal advice, and legal counsel should be contacted before any action is taken that might be influenced by this publication.

About Gunster

Gunster, Florida’s law firm for business, provides full-service legal counsel to leading organizations and individuals from its 12 offices statewide. Established in 1925, the firm has expanded, diversified and evolved, but always with a singular focus: Florida and its clients’ stake in it. A magnet for business-savvy attorneys who embrace collaboration for the greatest advantage of clients, Gunster’s growth has not been at the expense of personalized service but because of it. The firm serves clients from its offices in Boca Raton, Fort Lauderdale, Jacksonville, Miami, Orlando, Palm Beach, Stuart, Tallahassee, Tampa, The Florida Keys, Vero Beach, and its headquarters in West Palm Beach. With nearly 200 attorneys and 200 committed support staff, Gunster is ranked among the National Law Journal’s list of the 500 largest law firms and has been recognized as one of the Top 100 Diverse Law Firms by Law360. More information about its practice areas, offices and insider’s view newsletters is available at www.gunster.com.


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