The Securities and Exchange Commission has granted 45 more days to comment on the Nasdaq proposed internal audit function rule.
In March, the SEC requested public comments on a proposal from Nasdaq to require Nasdaq-listed companies to attain an internal audit function (see
So far, the SEC has received 38 comments on the proposal, which are available at
According to the global consulting firm Protiviti, a good portion of the letters came from top executives of Nasdaq-listed companies, with CFOs being at the top of the list. Many of them expressed concerns about the additional expense their companies might face if they had to conduct an internal audit function. Protiviti pointed out that “companies with a small revenue base are especially sensitive to the cost issue, particularly if they qualify as an ‘emerging growth company.’” Some of the respondents are now asking for a microcap exemption based on a market capitalization threshold.
Given that most of the letters indicate resistance to the rule, the SEC decided that it would be wise to extend the comment period. Doing so would give the Commission time to consider Nasdaq’s proposal and evaluate the incoming comments. The SEC's statement can be found at