|  | | 2006 News and Press Releases | | |
HEADLINE NEWS:
SEC, Accounting Board Officials To Weigh Sarbanes-Oxley Update
Carrie Johnson
WashingtonPost.com. November 11, 2006
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EXCERPT: Leaders of the Securities and Exchange Commission and the panel that oversees the accounting industry will meet Sunday in an effort to resolve differences over how to overhaul a controversial corporate accountability measure that business groups have targeted as overly expensive. Tension over a part of the 2002 Sarbanes-Oxley law, which requires companies to review their financial controls and to have auditors pass judgment on them, spilled into public view this week after the release of portions of a letter by SEC Chairman Christopher Cox proposing changes. The Public Company Accounting Oversight Board, which reviews the work of auditors, met privately for 90 minutes yesterday to consider how to respond to Cox's letter, which urged the board to be flexible and cost-conscious in response to complaints from businesses. Cox and former Federal Reserve Board official Mark W. Olson, who now leads the accounting panel, are to meet this weekend to discuss the issues. The exact language in Cox's letter has not been made public. Both agencies declined to release it yesterday. But speculation raged after reports suggested that Cox had proposed that small and mid-size companies could avoid reviews of their internal controls altogether or that regulators could render the reviews virtually useless by significantly heightening the standard for what kinds of transactions were important enough for auditors to assess. Cox, in a telephone interview yesterday, rejected the notion that regulators would gut the internal control standard, which was put in place to help detect fraud and financial errors. Instead, he said, the goal was to retool the provision using "the lessons learned from the past four years," including making sure that "things that don't have to do with financial statements don't have excessive attention" and ensuring that small companies do not bear "disproportionate" cost burdens. Cox declined to be more specific, adding that some of the language mentioned earlier in the week was flatly inaccurate or had already been "overtaken by events." Several of Cox's ideas spring from a report last year by a committee of small business leaders, which entreated the agency to exempt their companies from internal control reviews. Cox publicly rejected that option. But concern has persisted over the wording of the changes, and what they mean in practice, which can be difficult to grasp for anyone who is not an accountant. |
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