CEO

CFO

CDO

CRO

CICO

Public companies with more than $10 million of assets whose shares are held
by more than 500 investors are required to file auditors annual reports (Form
10-K or 10-KSB) and quarterly reviewed reports (Form 10-Q or 10-QSB) with
the SEC.

The annual report of public companies normally contains the following

financial information:
1. Audited financial statements, including their notes
2. MD&A of financial condition and results of operations
3. Management certifications of financial statements and internal
controls
4. Managements assessment of the effectiveness of ICFR
5. ACR
6. Independent auditors report on financial statements
7. Independent auditors report on the effectiveness of ICFR
8. Five-year summary of selected financial data
9. Summary of selected quarterly financial data for the past two years
10. Quarterly market data for the past two years, including high and low
stock prices for common stock, dividends paid, and price earnings ratio.
Section 302

Small Reporting Companies

The SEC proposed its principles-based rules for smaller
companies for so-called nonaccelerated filers companies
below the $75 million market capitalization.

Section 404 Costs

Benefits of Section 404 Compliance

Sustainable Section 404 Compliance

the actual cost of auditing ICFR is in the

range of $1.5 million to $10 million, with an
average of $2.6 million for Fortune 1000
companies

The expected benefits of compliance with

Section 404 are (1) more investor
confidence in financial reports, (2) more
accurate and reliable financial reports, (3)
more financial fraud prevention and
detection, (4) more effective ICFR that
improves operating, investing, and
financing activities, and (5) lower cost of
capital.
companies should shift away from a project
approach to a continuous process of
integrating sustainable compliance into
their corporate governance structure.