Thursday, April 10, 2008

SOX Life Blog: Flagging the "SEC's SOX for Small Business Reference"

Dreading your pending SOX initiative? Or the thoughts of IPO? Or how you might refine your implementation?

Hopefully, "Sarbanes-Oxley Section 404A Guide for Small Business" from the SEC takes some of the sting out of it. This incorporates much of the thinking and discussion in the last 18 months about "how much is enough" for small business. I also think it gives existing implementations an interesting viewpoint from which to re-assess their current environment.

SEC's SOX for Small Business Reference

Labels: coso, reference, sec, small business, SOX Life Blog

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Monday, April 07, 2008

PCAOB Addresses Emerging Audit Issues In 2008 Forums on Auditing in the Small Business Environment

The Public Company Accounting Oversight Board today announced the 2008 series of its Forums on Auditing in the Small Business Environment. These forums are designed to help share important information with registered public accounting firms and public companies operating in the small business community.

The 2008 agenda will include a discussion of practical quality control policies and procedures, and evolving accounting and auditing issues. The discussions also will address the application of certain auditing standards and observations from the Board’s disciplinary orders. In addition, the 2008 agenda will include a discussion of the implementation of Auditing Standard No. 5, An Audit of Internal Control Over Financial Reporting That Is Integrated with An Audit of Financial Statements.

“Small Business Forums have been an effective way to share timely information about the PCAOB’s oversight programs with small firms,” said Mark W. Olson, PCAOB Chairman. “In addition, the forums provide an opportunity for small firms and issuers to discuss issues facing the small business community with us and each other in an informal setting.”

PCAOB Addresses Emerging Audit Issues In 2008 Forums on Auditing in the Small Business Environment

Labels: as5, forums, pcaob, small business

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Saturday, February 23, 2008

Small companies also can benefit from Sarbanes-Oxley

If you listened carefully, you could almost hear the collective sigh of relief from 5,000 smaller public companies when Securities and Exchange Commission (SEC) Chairman Christopher Cox proposed yet another extension to the Sarbanes-Oxley (SOX) deadline for an external audit of Internal Control over Financial Reporting (ICFR).

The SEC previously appeared to be steadfast in upholding the set deadline for non-accelerated filers, or public companies with less than $75 million in public float, even though the business community continued to complain that SOX was too costly. The SEC is expected to vote on Cox’s proposal early this year and decide if that sigh of relief was premature.

Small companies also can benefit from Sarbanes-Oxley

Labels: 404 delay, SEC (Securities and Exchange Commission), small business

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Monday, October 22, 2007

PCAOB Issues Staff Guidance On Auditing Internal Control in Smaller Public Companies

The Public Company Accounting Oversight Board today published for public comment staff guidance on auditing internal control over financial reporting in smaller public companies.

The guidance explains how auditors can apply the Board's internal control auditing standard, Auditing Standard No. 5, An Audit of Internal Control Over Financial Reporting That Is Integrated with An Audit of Financial Statements, to audits of smaller, less complex public companies.

When it adopted Auditing Standard No. 5 in May, the Board committed to provide additional guidance on applying the standard to audits of smaller public companies. Auditing Standard No. 5 provides direction to auditors on scaling the audit based on the company’s size and complexity.

PCAOB Issues Staff Guidance On Auditing Internal Control in Smaller Public Companies

Labels: as5, pcaob, small business

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Tuesday, May 29, 2007

10 Threats to SOX Compliance for Smaller Public Companies

Lord & Benoit, a leading Sarbanes-Oxley research and consulting firm, is applauding the efficiencies and affordability of this week's PCAOB and SEC actions requiring smaller public companies to comply with Sarbanes-Oxley this year. To help CFOs to navigate wisely through the process, Lord & Benoit just published a study, 10 Threats to SOX Compliance for Smaller Public Companies.

In summarizing the results, Lord & Benoit suggests this list should be used by CFOs as a starting point for a macro-level risk assessment at smaller public companies. Identifying potential concerns, developing action plans to remediate these risks, and taking quick action can minimize the likelihood of an adverse Section 404 report at the end of the first year of compliance.

10 Threats to SOX Compliance for Smaller Public Companies

Labels: as5, pcaob, sec, small business

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Tuesday, May 08, 2007

SARBANES-OXLEY ADVICE FOR SMALLER PUBLIC COMPANIES

Up to now, smaller public companies -- usually those with just less than $75 million in public equity -- have not been required to comply with Section 404 of the Sarbanes-Oxley Act. That section requires that a public company's management file a report on its assessment of the company's internal control over financial reporting -- including the financial work that passes through IT. It also requires the company's auditors attest to the quality of the company's internal control over financial reporting in the auditor's annual report.

The Securities and Exchange Commission (SEC) itself has recognized the challenges for smaller companies: smaller companies typically don't have full-time financial controllers; managers in smaller companies have a broad span of control, and this could lead to management override of financial controls; and smaller companies are more dynamic and don't have well-documented processes. Your company may have a lot of work to do to produce a report that makes investors feel confident about your numbers -- even if you are the most honest company.

SARBANES-OXLEY ADVICE FOR SMALLER PUBLIC COMPANIES

Labels: Champy, sec, small business

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Thursday, April 19, 2007

Small biz hits Sarbanes-Oxley law

Lawmakers and regulators in Washington, D.C., yesterday heard an earful from small-business owners, including some from Massachusetts, who claimed the Sarbanes-Oxley Act is burdening firms and stifling growth.

Complaints ranged from the costs associated with the act’s accounting regulations to firms balking at going public if it means spending so much money complying with provisions.

“From my perspective as an entrepreneur, the atmosphere for raising capital in the U.S. has taken a turn for the worse,” said Joseph Piche, chief executive of Franklin-based Eikos Inc., a privately held nanotechnology firm. Piche, whose firm has explored going public, and others testified at a hearing of the U.S. Senate’s Small Business and Entrepreneurship Committee, headed by Sen. John Kerry(D-Mass.).

Small biz hits Sarbanes-Oxley law

Labels: small business, sox

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Testimony Concerning The Sarbanes-Oxley Act of 2002 and Its Impact on Small Businesses

Chairman Kerry, Ranking Member Snowe, and Members of the Committee:

I am pleased to appear today on behalf of the Public Company Accounting Oversight Board ("PCAOB" or the "Board"). to speak about the impact of the Sarbanes-Oxley Act of 2002 (the "Act") on small business, and, in particular, the PCAOB’s oversight of small audit firms. I am also pleased to join Chairman Cox before you today. The PCAOB works closely with the Securities and Exchange Commission ("SEC") to achieve our shared goal of protecting the interests of the investing public in the preparation of informative, accurate and independent audit reports on public company financial statements.

I. Introduction and Background

This Committee’s focus on small business and entrepreneurship and the Committee’s particular focus today on the impact of the Act are both appropriate and very timely. The PCAOB, along with our colleagues at the SEC, are in the final stages of replacing Audit Standard 2, which I will later describe in greater detail. A priority concern that triggered our current efforts is the desire to assure that the audit standard mandated by the Act can be conducted in a manner consistent with the size and complexity of America’s small publicly traded companies.

Testimony Concerning The Sarbanes-Oxley Act of 2002 and Its Impact on Small Businesses

Labels: AS2, pcaob, small business

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Monday, April 16, 2007

Wanted: Money master, two days a week

When a small business calls on Allan Foerster or Steven Walker, it gets more with less.

Both men are chartered accountants, and both serve as temporary chief financial officers -- popularly known as "CFOs to go" -- for small businesses. They perform the duties of a full-time chief financial officer but on a limited or part-time schedule, working a few days a week for a small company.

Mr. Foerster, of Kitchener, Ont., has been a temporary chief financial officer for seven years and has his own one-man company, CFO 2 Go, Inc. He says increased scrutiny over governance and an emphasis on accounting responsibility, spurred in part by the Sarbanes-Oxley Act in the United States, has made it vital for even small businesses to have a chief financial officer.

But few small businesses can afford a full-time CFO, so hiring a temporary one is a more palatable option.

Wanted: Money master, two days a week

Labels: governance, small business, temporary CFO

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Tuesday, February 27, 2007

Kerry, Snowe Urge Sarbanes-Oxley Extension for Small Firms

Today Senators John Kerry (D-Mass.) and Olympia J. Snowe (R-Maine) called for a delayed
implementation of the Sarbanes-Oxley Section 404 requirements for small public firms to ease the burden on complying with the expected new auditing
standards. Section 404 requires firms to establish internal control frameworks and to file internal control reports. The Securities and
Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB) proposed rules and guidance late last year addressing this section
and are accepting public comments through Monday, February 26th.

"We can have strong corporate accountability standards while also reducing the burden for small firms who spend more time and money earned
than big companies to comply with Sarbanes-Oxley," said Kerry. "We must do everything possible to appropriately reduce red tape in order for small
firms to grow and become dynamic public companies."

A recent Government Accountability Office (GAO) report requested by Senators Snowe and Mike Enzi (R-Wyo.) found that small public companies
spend considerably more on implementing Sarbanes-Oxley, particularly Section 404. The report found that firms with less than $75 million in
market capitalization were spending 877 percent more than larger counterparts -- $1.14 in audit fees per $100 of revenue, compared to just
$.13 per $100 for firms with greater than $1 billion in market capitalization.

Kerry, Snowe Urge Sarbanes-Oxley Extension for Small Firms

Labels: extension, implementation, sarbanes oxley, small business

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Tuesday, January 23, 2007

SOX deadline may be stretched

Small companies may get a reprieve when it comes to complying fully with the Sarbanes-Oxley Act of 2002, a Securities and Exchange Commission official said today.

Speaking at a New York State Society of CPAs conference in New York, SEC chief accountant Conrad Hewitt said that accounting legislation could be extended past 2008 if the costs still exceed the benefits of the law, according to Reuters.

The SEC currently requires companies with a public market capitalization of less than $75 million to conduct a management assessment of their internal controls.

Those companies will not have to have to get an internal controls audit by external auditors until 2008.

SOX deadline may be stretched

Labels: extension, market capitalization, small business

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