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SOX
by leon on November 3, 2009
It looks like small public companies will get another stay of execution from forced compliance with Sarbanes-Oxley.
Bloomberg reports that Obama's chief of staff Rahm Emanuel wants Democrats to spare, yet again, small public companies worth less than $75 million from complying with Sarbanes-Oxley. And you would have to say that with the economy is going, and with US unemployment on the up and up, the Democrats will agree, if only to save their own skins.
The Securites and Exchange Commission has never required these businesses to comply with the rules and there have been multiple exemptions dating to 2004. SEC Chairman Mary Schapiro had granted yet another reprieve, giving small firms until next year to start paying auditors to scrutinize their internal controls. But in her press release at the time, Schapiro said there would be no more reprieves and that they would have to start complying for the fiscal years ending on or after June 15, 2010. "Since there will be no further Commission extensions, it is important for all public companies and their auditors to act with deliberate speed to move toward full Section 404 compliance," Schapiro said."
Obviously she hadn't expected the White House to step in.
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Vote for Emanuel presses for another Sarbanes-Oxley exemption:
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Rating: 9.00 out of 4 vote(s) cast.
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Response from:
Teresa Bockwoldt
(11/05/09 7:19am)
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SOX 404(a): Management Attestation, Effective December 15, 2007:
• Requires the management of a public company to assess the effectiveness of the company's internal controls
• Requires management to include in the company's annual report the conclusion of that assessment
SOX 404(b): Auditor Attestation, Effective June 15, 2009:
• Management's external auditor's must review management's assessment and complete their own assessment and publish their results
The amendment, proposed by Reps. Scott Garrett (R., N.J.) and John Adler (D., N.J.), would grant a permanent reprieve for non-accelerated filers for section 404(b). Scott Garrett said this reprieve would "free small businesses from onerous regulations."
Again, I left scratching my head.
The Representatives would not require 404(b) but leave 404(a) in place which would continue to subject small businesses to the SOX requirements and annual certifications. Just because 404(b) isn't in place does not mean that 404(a) does not apply. Additionally, public companies are required to certify the effectiveness of their internal controls quarterly via the 302 attestations. So, again, 404(a) and the 302 attestation are in place and yet companies would not be required to have auditors check if they are telling the truth. This amendment does nothing to "free small businesses from onerous regulations"; the Representatives are mistaken and misguided. If they were truly trying to accomplish what they stated, they would repeal both 404(a) and the 302 attestations as well. I am not sure if they are just trying to look like hero’s to small businesses but it seems they are not sure about what they are trying to accomplish.
All my best,
Teresa Bockwoldt MBA, MST
CEO & Co-Founder
Vibato, LLC
655 Montgomery Street, 5th Floor, Suite 540 San Francisco, CA 94111
Office: 415.240.4867 | Mobile: 707.477.0008 | Fax: 888.407.7725