Senators john kerry and Olympia Snowe are pushing for regulators to give small US companies another year before they have to comply with Section 404 of Sarbanes-Oxley, reports MarketWatch.

Just another short-term solution and seriously dumb in light of a report from research firm Glass Lewis, reported here, which shows that restatements are going up but for larger companies, it's heading the other way.

Why is this happening? Larger companies have managed to get their systems right because they've had to comply with the law and, as a result, they've fixed the problems with their internal controls. The smaller companies haven't had to comply - indeed, they've been fighting not to comply - and so their internal controls are all over the place. As a result, their restatements went up 40 per cent. For bigger companies, it went down 14 per cent.

No coincidence the numbers are so different, says Jack Ciesielski in his AAO blog.

"Along the lines of the ancient philosophical question, 'If a tree falls in a forest and nobody is there, does it make a sound?'consider this one: "Is a law really a law if it never goes into effect?"

"Or maybe: 'If a company's investors are left holding the bag because the company's misreporting to them could have been prevented by compliance with a law they passed - do politicians care?' "

Just as importantly, the Glass Lewis report is ammunition for those who say the law is working. That will ensure that Sarbanes-Oxley is here to stay.

Not quite a nail in the coffin of the Sarbox bashers, but it certainly makes it harder to argue their case.