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Sarbanes-Oxley Section 404
A Guide for Small Business

July 14, 2017

For 2007 annual reports, smaller public companies need to assess their internal control over financial reporting.

It doesn't have to be a chore.

What Constitutes Effective Internal Controls?

In a small company, just as in a large one, it is management's job to maintain a system of internal controls so that the financial statements will be reliable.

The SEC doesn't have specific rules that tell smaller public companies how to do this. There is, however, useful guidance available from other sources. One of these is the internal control framework set out by a private sector organization called the Committee of Sponsoring Organizations of the Treadway Commission. Summaries of two of their publications, Internal Control Over Financial Reporting — Guidance for Smaller Public Companies (2006) and

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