Trump administration plans to relax audit rules for listed companies, potentially costing the Big Four accounting firms $400 million in fees.

The U.S. Securities and Exchange Commission (SEC) is proposing to relax internal control audit requirements under the Sarbanes-Oxley Act, a move that could cost U.S. accounting firms over $4 billion annually in related fees. According to the SEC’s May proposal, public companies with a public float market capitalization below $2 billion will no longer need an auditor’s attestation on internal financial controls—up from the current $700 million threshold. Additionally, newly listed companies, regardless of size, will be exempt from this requirement for their first five years post-IPO. The SEC estimates the change will exempt roughly 1,700 companies, or 27% of all listed firms, from auditor attestation. A prior U.S. Government Accountability Office analysis found that after companies meet the current threshold and begin undergoing auditor internal control attestation, median audit fees rise by approximately 13%. Data from Ideagen Audit Analytics shows that companies potentially eligible for the exemption paid around $3.8 billion in audit fees last year, translating to an estimated $4.3 billion in related revenue for accounting firms. The Big Four accounting firms—EY, Deloitte, PwC, and KPMG—have all opposed the relaxed rules, arguing that even if independent attestation is scrapped, some internal control tests will still be required in regular audits, meaning actual cost savings for companies may be lower than expected. Investor groups have also raised concerns about the full five-year exemption for newly listed firms. SEC Chair Paul Atkins is advancing a series of deregulatory measures, including cuts to quarterly reporting requirements, and positions these reforms as part of efforts to reduce listing costs and encourage more companies to go public via IPOs.