Companies continue to make improvements in internal control over financial reporting, with accelerated filers hitting an all-time rock-bottom rate of adverse opinions of only 2.4 percent. Smaller companies that file their reports on internal control without an audit also showed some modest improvements in the most recent year as well, according to the latest report from Audit Analytics.

WhalenIn the sixth year of compliance with Sarbanes-Oxley Section 404 requirements, companies with a public float greater than $75 million reduced their rate of adverse opinions from 5 percent in the fifth year to only 2.4 percent in the most recent year. Even if companies that have missed their filing deadlines turn in adverse opinions, it would bump the rate to only 2.8 percent, said Don Whalen, director of research for Audit Analytics.

Over the six reporting years that public companies have been filing the reports, adverse opinions have steadily fallen from a high of 16.9 percent for fiscal years ending after Nov. 15, 2004, to the current low of 2.4 percent, said Whalen. “It’s getting to the point where you wonder if it can even be reduced anymore,” he said.

For smaller companies—those below a market capitalization of $75 million that are not required to provide an auditor’s report—improvements have come more slowly, the data shows. With their 2009 filings completed, smaller companies have just completed their fourth cycle of reporting. In the most recent year, 27.8 percent reported problems with internal controls, down from 32.3 percent in the prior year and 32.8 percent in the first year.

“Smaller companies are showing minor improvement, but they’re not nearly as well off as the larger companies,” Whalen said. “The adverse rate for management-only reports is ten times higher than for companies that provide the auditor attestation.”