Cox gives companies SOX reprieve
The SEC wants to give smaller companies more time to comply with section 404, Chairman Christopher Cox said this morning.
The Securities and Exchange Commission wants to give smaller companies more time to comply with section 404 of the Sarbanes-Oxley corporate reform law, Chairman Christopher Cox said this morning.
Section 404 of the act, passed in 2002, requires that businesses provide an auditor’s report on their internal controls and outlines management guidance standards.
Audit reports are significantly more costly for smaller businesses, so the SEC has not yet required nearly 5,000 companies to comply with that section of the rule, Mr. Cox said.
This is the fourth time the SEC has postponed compliance for businesses whose public float of less than $75 million.
Mr. Cox said the SEC intends to propose an additional one-year delay.
The SEC will conduct a cost-benefit study of the costs associated with complying with section 404 that will be finished in June, 2008, Mr. Cox said.
Currently, small companies must comply with the management guidance rule by the end of this year and the auditing section by 2009.
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