Just one day after House Small Business Committee Chairwoman Nydia Velázquez [D-N.Y.] urged Securities and Exchange Commission [SEC] officials to extend enforcement of Section 404 of the Sarbanes-Oxley Act of 2002 [see "House Committee Considers Impact of SOX Regulations on Small Business"], two prominent U.S. Senators weighed in, too.
Earlier today, Sens. John Kerry [D-Mass.] and Olympia J. Snowe [R-Maine] outlined specific steps the SEC should take to provide more time and assistance to small public companies to comply with Sarbanes-Oxley [SOX] internal control regulations.
Kerry and Snowe, as chairman and ranking member of the Committee on Small Business and Entrepreneurship, have been closely following the impact of SOX compliance on small public companies worth less than $75 million.
“Small public companies still face higher costs than large firms and deserve more time to comply with the recent changes to Sarbanes-Oxley," Kerry declared. "The regulations issued by the SEC last month are an important step, but I, again, strongly urge the SEC to give small public companies additional time to comply with Sarbanes-Oxley and to find additional ways to reduce their regulatory burden."
Sen. Snowe agreed. “We need to give America’s small businesses the necessary time and resources needed to successfully comply with these new regulations,” she noted. “By providing the proper tools -- such as an adequate extension, a full cost assessment, and a compliance guide to institute these regulations -- our nation’s small businesses will have what they need to effectively reduce their regulatory burden.”
At a committee hearing on April 18, and in several oversight letters, Kerry and Snowe called on the SEC and Public Company Accounting Oversight Board to give smaller firms up to a year extension to comply with the law and take additional steps to reduce the burdens small businesses face. Last month, the SEC issued final rules for firms to follow in complying with Section 404 of Sarbanes-Oxley, which sets management and accounting reporting standards.
In a letter to SEC Chairman Christopher Cox [pictured above], Kerry and Snowe requested:
* A reasonable extension for small public companies to comply with the newly issued regulations;
* A full assessment of the cost of the new rules under the Regulatory Flexibility Act before they become effective later this year;
* A small-business compliance guide, to be published by the SEC, that would assist small companies in implementing the new internal controls requirements; and
* A regular report by the SEC’s Advisory Committee on Smaller Public Companies on the impact of Section 404, as well as how the financial burden of compliance with the Sarbanes-Oxley Act may be reduced.
GoodBiz113's take: We appreciate the bipartisan efforts of U.S. Senate and U.S. House small business committee leaders to promote complete understanding of SOX regulations before the SEC institutes full compliance.
For information about what your company or not-for-profit organization needs to do in order to comply with SOX, check out the resources we've provided under "Relevant Goods."
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