WASHINGTON – Today Senator John Kerry (D-MA) called on the Securities Exchange Commission (SEC) to give small public companies additional time to comply with the upcoming changes to the Sarbanes-Oxley regulations. Kerry chaired the first congressional hearing of the 110th Congress addressing Sarbanes-Oxley and focused on the law's impact on small businesses.

"Too many small public companies, who played by the rules, are expected to clean up the mess made by Enron and other rogue companies," said Kerry, Chairman of the Committee on Small Business and Entrepreneurship. "By all accounts, Sarbanes-Oxley has brought back accountability to corporate governance, auditing, and financial reporting for public companies. And we need to keep that law strong and effective. But we also need to help small businesses comply with Sarbanes-Oxley by providing them with appropriate regulatory relief and additional time. This will help create jobs and strengthen our capital markets."

SEC Chairman Christopher Cox and the Public Company Accounting Oversight Board (PCAOB) Chairman Mark Olson testified on their recently proposed guidance for accounting management and standards for auditors in complying with Section 404 of the Sarbanes-Oxley law. The draft guidance and standards, proposed in December 2006, took on a "risk based, top down" approach to compliance with the law. Final guidance is expected in June 2007.

Other witnesses included Thomas Venables, President & CEO, Benjamin Franklin Bank in Massachusetts, Richard Wasielewski, Vice President and Chief Financial Officer of Nortech Systems, Inc. in Minnesota, and Joseph Piche, CEO and Founder of Eikos, a privately held company located in Massachusetts. All three witnesses testified about the complexity and cost of complying with the law as it is currently written, as well as their need for more time to comply with the new rules and standards.

In February of this year, Kerry and Ranking Member Olympia Snowe sent a letter to Chairmen Cox and Olson requesting a deadline extension of up to an additional year for non-accelerated filers – those worth less than $75 million. A copy of the letter, and the SEC and PCAOB responses can be viewed at https://www.sbc.senate.gov/oversight/.

Last Congress, Kerry introduced the Small Business Sarbanes-Oxley Compliance Assistance Act (S.3919), to help small firms with the cost of compliance and create a task force to report on ways to assist small public companies with Sarbanes-Oxley. As the regulatory picture becomes clearer with final rules from the SEC and PCAOB, Kerry will consider what additional steps are needed to assist small businesses.