SEC Plans to Roll Back Enron-Era Auditor Attestation Rules, Exempting Most Public Companies

The Securities and Exchange Commission plans to exempt the majority of remaining US public companies from auditor attestation of internal controls, scaling back a key Sarbanes-Oxley requirement enacted after Enron's 2001 collapse. The proposal would exempt every company with a public float below $2 billion, plus all companies in their first five years after going public. SEC Chair Paul Atkins said the change aims at "making IPOs great again," arguing attestation costs deter listings. The roughly 1,100 large caps still subject to the requirement represent 94% of market value. Ideagen Audit Analytics data shows exempt companies accounted for 60% to 80% of annual financial restatements in recent years and more often report material control weaknesses. A GAO report estimated attestation makes up 13% to 19% of total audit bills, implying $400 million to $600 million in savings across the 1,600 newly exempt companies. Investor groups and audit firms oppose the rollback. The US Chamber of Commerce supports it, calling current rules "disproportionately expensive and regressive."