As smaller public companies hold out hope that Congress will exempt them from compliance with the external auditor provision of Section 404(b) of the Sarbanes-Oxley Act, an academic paper may provide ammunition to the exemption’s supporters.
A paper published by University of Texas accounting professor William Kinney and research student Marcy Shepardson suggests that there are less expensive ways to gauge a company’s control effectiveness short of a full external audit of internal controls over financial reporting, as Section 404(b) requires.
