Tuesday, January 23, 2007

SEC may extend SOX deadline for small US companies

The deadline for small companies to fully comply with Sarbanes-Oxley accounting legislation could be extended past 2008 if the costs still exceed the benefits of the law, the top accountant at the U.S. Securities and Exchange Commission said on Monday.

The SEC is currently requiring companies with a public market capitalization of less then $75 million to conduct a management assessment of their internal controls. But those companies will not have to have to get an internal controls audit by external auditors until 2008.

For micro-cap companies ... they will not have to have an internal control audit until 2008, and if we don't see the cost-benefits are in line by then we'll have to defer it even more," Conrad Hewitt, chief accountant at the SEC, said at a New York State Society of CPAs conference in New York.

The Sarbanes-Oxley law, which was adopted by Congress in 2002 to fight corporate fraud, requires companies to conduct a management assessment and get an external audit of their internal controls. Known as section 404, the four-sentence passage has become a lighting rod for business groups who complain its costs far exceed its benefits.

SEC may extend SOX deadline for small US companies

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