Tuesday, February 05, 2008

SEC Begins Small Business Costs and Benefits Study of Sarbanes-Oxley Act Section 404

The Securities and Exchange Commission today announced that its professional staff has commenced a cost-benefit study of an upcoming auditor attestation requirement for smaller companies under Section 404(b) of the Sarbanes-Oxley Act of 2002.

The study will collect and analyze extensive "real world" cost and benefit data from a broad array of companies currently complying with Section 404 under newly-issued guidance for companies and auditors. The new guidance for management and the new auditing standard were intended to reduce the compliance costs of Section 404 while strengthening its focus on material controls. In addition to assessing the Section 404 cost reductions resulting from the Commission's recent actions, the final report also will inform any decision to improve the efficiency and effectiveness of Section 404 implementation.

SEC Begins Small Business Costs and Benefits Study of Sarbanes-Oxley Act Section 404

Labels: 404, cost and benefits, sec

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Thursday, January 10, 2008

First-of-Its-Kind Report Quantifies Actual Cost of Sarbanes-Oxley Section 404 Compliance for Smaller Public Companies

Lord & Benoit, a SOX research and consulting firm, recently gathered empirical cost data to answer a crucial question that government officials, legislators, and business executives have been asking since June of 2007: "what exactly is the cost for a smaller public company to comply with Sarbanes-Oxley Section 404(a) and Section 404(b) regulations using the latest guidance issued by the SEC and PCAOB?" The data reveal that for non-accelerated filers, the total average first-year cost for management assessment and additional audit fees is $78,474, which is 13.8% less than the $91,000 cost the SEC initially predicted.

The new Lord & Benoit Report, entitled "The Sarbanes-Oxley Investment: A Section 404 Cost Study for Smaller Public Companies," is based on a cross-section of 29 smaller public companies in the semiconductor, manufacturing, distribution, banking and finance, real estate, food and beverage, transportation, mining, software, energy, services, and biotech industries. The Report is also based on an Audit Analytics study of actual audit fees reported by nearly 5,500 public companies.

First-of-Its-Kind Report Quantifies Actual Cost of Sarbanes-Oxley Section 404 Compliance for Smaller Public Companies

Labels: 404, actual cost of compliance, Lord and Benoit

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Sunday, April 29, 2007

Senate rejects Sarbanes-Oxley change

The U.S. Senate on Tuesday defeated a Republican attempt to weaken 2002's post-Enron Sarbanes-Oxley laws by making it optional for many corporations to comply with a controversial section on internal controls.

By a vote of 62-35, the Senate set aside an amendment to make compliance with Sarbanes-Oxley's Section 404 optional for companies with total market value of less than $700 million.

The amendment was offered by South Carolina Republican Jim DeMint, who tried to attach it to a bill on the Senate floor that was focused chiefly on boosting investment in research, and improving science, engineering and math education.In response to the amendment, defenders of Sarbanes-Oxley proposed and won passage, by a vote of 97-0, of a symbolic Senate statement expressing support for efforts already under way by federal regulators to fine-tune Section 404.

Senate rejects Sarbanes-Oxley change

Labels: 404, sarbanes oxley, senate

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Wednesday, April 18, 2007

Oxley Unhappy with SOX; Blames PCAOB for Problems

Former Congressman Michael Oxley is unhappy with implementation of the corporate reform legislation that bears his name.

In an interview with CFO.com, he was asked, “Are you happy with the way Sarbanes-Oxley has been implemented?” His answer: “Not really. The law has gotten a lot of criticism.” He noted that the vast majority of the complaints center on Section 404, which requires an audit of internal controls over financial reporting.

“It was Auditing Standard No. 2, promulgated by the PCAOB (Public Company Accounting Oversight Board), that started all the problems,” he said. “It was two paragraphs long, but by the time the PCAOB was done, it was 330 pages of regulations. It was far too prescriptive and [more] expensive than anyone anticipated. So, [the PCAOB] and the Securities and Exchange Commission proposed a risk-based assessment to better define material weakness, with more emphasis on internal audit. It adds flexibility with smaller companies.”

Oxley Unhappy with SOX; Blames PCAOB for Problems

Labels: 404, AS2, Michael Oxley, pcaob, sarbanes oxley

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Thursday, April 05, 2007

SEC Tells Staff to Revise AS5

The Securities and Exchange Commission is sending its accounting staff to work with the Public Company Accounting Oversight Board on additional revisions to the auditing standard that has been criticized by public companies and legislators for creating costly audits of internal controls.

At a Wednesday SEC hearing, staff members of the Office of the Chief Accountant asked the commissioners for permission to work with the PCAOB to address several concerns that were raised during the current public comment period on the revised Auditing Standard No. 2 — which both regulators loosely refer to as AS5. Saying the staff will be "fine-tuning" AS5, the commissioners voted unanimously on all the staffers' requests.

SEC Tells Staff to Revise AS5

Labels: 404, as5, pcaob, sec, sox

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