Monday, July 31, 2006
Four years later, Sarbanes-Oxley still an adjustment
Four years after the passage of the Sarbanes-Oxley corporate reforms, companies have begrudgingly adjusted to the law's hefty internal control requirements, but small companies are still worried about how much it will cost to comply with the law.
Companies of all sizes have complained that the law's internal control section, which requires companies' outside auditors to say publicly whether a company's controls are adequate, is too expensive.
Small companies, those with less than $75 million in market capitalization, will likely have to comply next year, SEC Chairman Christopher Cox has said.
That comes as a relief for some investors as fraud is often more likely to occur at smaller companies. But smaller companies are worried the law's onerous control requirements, known as section 404, will take a big chunk out of profits and their ability to invest in their businesses.
posted by Brian Moran @ 8:49 AM