SEC may give another extension for SOX 404
20 Sep 2005
The (PDF 65k) for the meeting of the US Securities and Exchange Commission for Wednesday, 21 September 3005, includes a proposal to give smaller public companies an additional one-year deferral for compliance with Section 404 of the Sarbanes-Oxley Act of 2002. Section 404 requires that companies and their auditors file reports on the strength of their internal controls over financial reporting.
The new compliance date would be a company's first financial year ending on or after 15 July 2007. In March of this year, the SEC gave foreign private issuers and non-accelerated filers a deferral until 15 July 2006 (see our News Story of 3 March 2005). At that time, the SEC noted that one reason for the deferral is that "many foreign companies are facing regulatory and reporting challenges in addition to internal control reporting as companies incorporated in a European Union member country are required to prepare their financial statements for 2005 in accordance with new International Financial Reporting Standards."