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Governance, Risk, Audit & Privacy · Intermediate

SOX Section 404

SOX provision requiring annual management assessment of ICFR and, for accelerated filers, external auditor attestation.

Definition

Section 404(a) requires management's report on the effectiveness of internal control over financial reporting, typically using the COSO framework. Section 404(b) requires the external auditor to attest under PCAOB AS 2201. Material weaknesses must be disclosed.

Example

Management concludes ICFR is effective; the auditor issues an unqualified 404(b) opinion.

Exam tip

404(b) does not apply to non-accelerated filers.

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