SEC proposal to ease audit rules could cost Big Four about $430 million in fees

News Editor

2026-09-21 00:58:41

The U.S. Securities and Exchange Commission is proposing to relax internal control audit requirements under the Sarbanes-Oxley Act, a move that could strip more than $400 million a year from accounting firms tied to related work. Under a proposal released by the SEC in May, listed companies with a public float below $2 billion would no longer need an auditor attestation on internal financial controls, up from the current $700 million threshold. Newly listed companies, regardless of size, would also be exempt during their first five years after going public. The SEC estimates the change would remove the attestation requirement for about 1,700 companies, or 27% of listed firms. Data from Ideagen Audit Analytics shows companies that may qualify for the exemption paid about $3.8 billion in audit fees last year, implying roughly $430 million in value for accounting firms. Ernst & Young, Deloitte, PwC and KPMG have opposed the proposal, while investor groups have also raised concerns about the five-year exemption for new issuers.

The U.S. Securities and Exchange Commission is seeking to loosen internal control audit requirements under the Sarbanes-Oxley Act, a change that could cost U.S. accounting firms more than $400 million a year in related fees.

Under a proposal released by the SEC in May, listed companies with a public float below $2 billion would no longer need an auditor attestation on internal financial controls. The current threshold is $700 million.

The proposal would also exempt newly listed companies of any size from the requirement during their first five years after going public.

SEC says about 1,700 companies would qualify

The SEC estimates that about 1,700 companies, or 27% of listed firms, would no longer need auditor attestation if the rule change is adopted.

Audit fee median rose about 13% under the current threshold

A previous analysis by the U.S. Government Accountability Office found that once companies crossed the current threshold and began receiving auditor attestation on internal controls, the median audit fee increased by about 13%.

Data from Ideagen Audit Analytics shows that companies likely to qualify for the exemption paid about $3.8 billion in audit fees last year. Based on that figure, the related work is worth about $430 million to accounting firms.

Big Four firms oppose the rollback

Ernst & Young, Deloitte, PricewaterhouseCoopers and KPMG have all opposed the easing of the rules. They argue that even if the separate attestation requirement is removed, some internal control testing would still need to be included in the regular audit, which means the actual savings for companies may come in below expectations.

Investor groups have also raised concerns about giving newly listed companies a full exemption during their first five years.

Atkins pushes broader deregulatory agenda

SEC Chair Paul Atkins is advancing a broader set of deregulatory measures, including cuts to quarterly reporting requirements. He has framed the changes as part of an effort to lower the cost of being public and encourage more companies to pursue IPOs.

This article was originally published by Bit.Fan. For more cryptocurrency news and market insights, visit www.bit.fan.

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