|  | | 2007 News and Press Releases | | |
HEADLINE NEWS:
SEC Authorizes One-Year SOX 404(b) Extension For SMBs
Staff Writer
AccountingWEB.com. December 13, 2007
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EXCERPT: The U.S. Securities and Exchange Commission has agreed to provide small businesses with an additional one year extension to comply with Sarbanes-Oxley Section 404(b) internal control requirements. SEC Chairman Christopher Cox said he wants to give small companies more time to meet certain auditing requirements of the Sarbanes-Oxley corporate reform law. "This will help ease the burden on small firms and help encourage more small businesses to become public companies - while still ensuring transparency and honest accounting," said Senator John Kerry (D-MA), chairman of the Senate Committee on Small Business and Entrepreneurship "I commend Chairman Cox and the Securities and Exchange Commission for implementing this delay which will give these small firms time to successfully meet Sarbanes-Oxley's requirements and enable the SEC to fully consider the economic impacts on small publicly traded companies," said Senator Olympia Snowe (R-ME), ranking member on the Committee on Small Business and Entrepreneurship. Small firms worth less than $75 million face a higher burden than larger firms in complying with the Sarbanes-Oxley regulations. In 2006, restatements of financial results for large companies decreased by 20 percent, while restatements for the smaller firms increased by 42 percent due to the disproportionately higher cost and time needed to comply. Since the law was passed in 2002, the SEC has delayed compliance four times for small businesses. Currently, small companies -- those with a market capitalization below $75 million -- are expected to comply with the management guidance part of the law this year and the auditing section by 2009. Section 404(b) requires that companies review internal controls and have them audited by external auditors. Smaller companies were supposed to put this rule into effect beginning with audits for fiscal years ending after December 15, 2008. |
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