Individual investors in the US are confident in audited financial information, a Center for Audit Quality survey has found.
For the third year in a row, 75% of respondents to the Main Street Investor Survey said they have confidence investing in US public companies. Similarly, investor confidence in audited financial information released by public companies remained strong at 70%, unchanged from last year.
When asked who does the best job of protecting their interests aside from themselves, 32% of investors cited public company auditors as their first or second choice, with 16% of respondents selecting auditors as the single group that does the best job.
The newly-enacted Wall Street Reform and Consumer Protection Act exempted companies with market capitalisation of less than $75m from compliance with Section 404(b) of the Sarbanes-Oxley Act. Sixty-five percent of investors said they were concerned that smaller companies will no longer be required to have an auditor attest to and report on management’s assessment of internal controls.
Even more investors were troubled about the possibility of larger companies being exempted. Four out of five respondents said they would be concerned should Congress expand the exemption to companies with market capitalisation of $75 million or more.
The survey of 1,001 investors was conducted in July.