SOX 404 disclosures: a twenty-year review
Fiscal years 2006 to 2025
Adverse internal control opinions have declined for a second consecutive year, but the story underneath that headline is more complicated. The companies that remain adverse are largely the same ones year to year, so the decline in the overall rate reflects newer entrants leaving the filing population altogether rather than existing companies remediating.
Get the full picture on filer size, industry patterns and the SPAC effect that shaped three years of disclosure data.
Key takeaways
Twenty years of disclosure data, distilled into the trends that matter most for audit, compliance and risk teams.
The decline is concentrated, not distributed
Repeat adverse reports reached 76% of all adverse management reports in 2025, the highest share in the twenty-year series. Companies that remain adverse are staying adverse, while the overall rate falls because new entrants leave the population faster than they used to.
Company size remains the sharpest predictor of control effectiveness
The adverse rate ran at 3.8% for large accelerated filers versus 37.3% for non-accelerated filers in fiscal 2025, a gap that has held throughout the twenty-year period.
SPACs account for roughly a third of the recent decline
After SEC guidance in April 2021 pushed most SPAC adverse rates above 70%, the collapse in SPAC filings between 2021 and 2025 removed a large share of previously adverse disclosures from the population.
The underlying weaknesses have not changed in twenty years.
Insufficient accounting personnel resources and training appeared in 83.6% of adverse management reports in 2025. Control failures remain rooted in staffing and process rather than complex accounting errors.
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Get the full twenty-year dataset, broken down by filer size, industry and cause.