WASHINGTON – Senators John Kerry (D-Mass.) and Olympia J. Snowe (R-Maine) outlined specific steps the Securities and Exchange Commission (SEC) should take to provide more time and assistance to small public companies to comply with Sarbanes Oxley 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 Sarbanes Oxley 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. 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” said Kerry.
“We need to give America’s small businesses the necessary time and resources needed to successfully comply with these new regulations,” said Senator Snowe. “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 18th and in several oversight letters, Kerry and Snowe called on the SEC and Public 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, 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.
To read a copy of the letter, please click here.
