In our letter responding to the SEC’s proposed rule, Enhancement of Emerging Growth Company Accommodations and Simplification of Filer Status for Reporting Companies, we broadly support the Commission’s efforts to simplify the filing statuses given the existing overlap and complexity in making these determinations.
We also submit our observations and suggestions for the Commission to consider based on our perspective as independent accountants, focusing on the following themes:
- Amendments to the public float computation to reduce the impact of short-term volatility on filing status determination
- Importance of internal control over financial reporting (ICFR) and the related auditor attestation in maintaining trust in capital markets
- Potential impact of a significant reduction in integrated audit engagements on auditor choice
- Diversity in financial statement presentation and a lack of comparability among peer groups, resulting from the use of scaled disclosure alternatives that would be available to a larger group of issuers
We encourage the SEC to conduct additional outreach, especially with investors, to determine how the use of scaled disclosure alternatives and other emerging growth company (EGC) accommodations, as well as the exemption from auditor attestation of ICFR for a large number of issuers, would impact investors’ ability to make informed investment and voting decisions.
Download (PDF - 217.92KB) our letter to read our comments in full.
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