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What is Rule 404?

In an audit environment, when someone says “Rule 404” or “404”, then they are referring to Rule 404 of the Sarbanes-Oxley Act. It states that large-accelerated filers and accelerated filers must have their internal control environment audited by an external audit firm.

Rule 404

Here is the official paragraph from the AICPA website about rule 404:

“The Sarbanes-Oxley Act requires that the management of public companies assess the effectiveness of the internal control of issuers for financial reporting.  Section 404(b) requires a publicly-held company’s auditor to attest to, and report on, management’s assessment of its internal controls. “


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