On June 20, 2008, the Securities and Exchange Commission (SEC) approved a one-year extension of the compliance date for auditors of smaller public companies under the Section 404(b) auditor attestation requirement of the Sarbanes-Oxley Act of 2002.

The Commission said that with the extension, smaller companies will be required to provide auditor attestation statements in annual reports for fiscal years ending on or after December 15, 2009. During a House Small Business Committee in December 2007, SEC Chairman Christopher Cox said the delay would help the agency gain the data it needed to fully assess the costs small companies incur complying with Section 404. The delay was proposed in February in Release No. 33-8889, Internal Control Over Financial Reporting in Exchange Act Periodic Reports of Non-Accelerated Filers.

Along with announcing the news of the extension, the SEC said it gained approval from the Office of Management and Budget (OMB) to collect data for a study of the costs and benefits for small companies implementing Section 404. The results of the study are expected to become available during the extension period.

The SEC's Office of Economic Analysis is leading the study with assistance from the Office of the Chief Accountant and the Division of Corporation Finance.

The OMB's decision means the SEC staff can now begin collecting data for the study through interviews with financial executives from SEC registrants, their auditors, and shareholders.

The study aims to help determine whether the new the internal control guidance the SEC issued in June 2007 and the Public Company Accounting Oversight Board's (PCAOB) Auditing Standard (AS) No. 5, An Audit of Internal Control Over Financial Reporting That is Integrated with an Audit of Financial Statements, are lowering the costs of Section 404 compliance.