Friday, April 21, 2006
Small firms would get audit relief under SEC plan
WASHINGTON (MarketWatch) - Federal securities regulators should exempt small companies from certain sections of a controversial corporate-governance law, according to a draft of an advisory panel report scheduled to be released Monday.
Members of the Securities and Exchange Commission's Advisory Committee on Smaller Public Companies are recommending that firms with market capitalizations of less than $787 million get breaks on reporting their internal financial controls.
Small companies have complained that the costs of implementing Section 404 of the 2002 Sarbanes-Oxley Act are too high.
Committee members say the Securities and Exchange Commission should develop "scaled" or "proportional" regulation for two tiers of companies. The draft report says so-called "microcap" firms and "smallcap" companies should be subject to less-stringent regulations. Microcap companies are defined as having market capitalization of less than $128 million. The committee defines small cap companies as those with market capitalization of less than $787 million. A copy of the draft report was obtained by MarketWatch.
posted by Brian Moran @ 9:36 AM