A large school of thought has developed to support the argument that non-accelerated filers should be exempt from compliance with Section 404(b) of Sarbanes-Oxley, which requires external auditors to review and attest to the strength of a company’s internal controls.
But as much as non-accelerated filers denounce the burden of Section 404(b) compliance, they’re still confronted with one stubborn counter-argument: fraud happens.
The $31 million fraud uncovered this winter at Milwaukee-based Koss Corp.—small in dollar numbers, but huge relative to Koss’s $32 million market capitalization—is a powerful reminder that fraud can menace investors in small public companies just as much ...