Small public companies get a stay while regulators collect best practices. Small, public companies have gotten yet another
reprieve from having to comply with the Sarbanes-Oxley Act of 2004,
thanks to last week's decision by the Securities and Exchange
Commission to delay requiring small public companies to comply with
SarbOx and its complex Section 404.
The SEC's decisionto delay compliance for one
year, until fiscal years ending on or after Dec. 15, 2009is largely
thought to be due to the complexity, confusion and expense around
Section 404, which requires that businesses implement strict internal
controls and financial reporting measures.
"There has been tremendous push-back from business leaders in this
segment regarding cost versus benefit of SarbOx Section 404
compliance," said John Hagerty, a vice president with AMR Research.
"Primarily, it's an issue of cost and the burden it will place on
smaller firms that will have to spend a larger ratio of total revenue
than their larger brethren."
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