SEC will propose further delay of SOX 404 for small companies

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13 Dec 2007

In testimony yesterday before the US House of Representatives Committee on Small Business, US SEC Chairman Christopher Cox announced that the SEC will consider delaying, for one more year, the requirement that small public companies report on their internal financial controls and have them audited.

The requirement is otherwise scheduled to go into effect for calendar year 2008. The Commission plans to study the costs and benefits of the requirement. Click for Chairman Cox's Testimony (PDF 35k). Here is an excerpt:

We anticipate that the study and analysis of the results will be completed no earlier than June 2008. Under the current schedule, smaller public companies would be expected to begin complying with Sarbanes-Oxley section 404(b) for fiscal years ending after December 15, 2008, with the result that unless there is an additional deferral, companies will incur compliance costs before the SEC has the benefit of the study and analysis. As a result, I intend to propose to the Commission that we authorize a further one-year delay in implementation for small businesses in order to base our decision on final implementation of section 404(b) on the best available cost data.


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