In 2017, the administration proposed raising the bar to permanently exempt companies with market cap of less than $250 million from the audit attestation requirement—up from $75 million. The major goal of the proposal is to spur growth in the number of public companies, which have declined sharply since the late 1990s.
Ineffective internal controls are associated with poor quality of financial reporting and indicate that material errors may go undetected. The key question, however, is cost-benefit: how much valuable new information do investors receive in the ICFR attestation report?