Wednesday, July 12, 2006
SEC Moves Forward on Sarbanes-Oxley 404 Improvements
Washington, D.C., July 11, 2006 - The Securities and Exchange Commission, in another step toward improving the implementation of the Sarbanes-Oxley investor protection law, today published a Concept Release as a prelude to its forthcoming guidance for management in assessing a company's internal controls for financial reporting.
Following its May 10, 2006, Roundtable devoted to Sarbanes-Oxley Section 404 implementation issues, the Commission issued a roadmap for improvements entitled "Next Steps for Sarbanes-Oxley Implementation" (SEC Press Release 2006-75, May 17, 2006). Today's issuance of the Concept Release is one of the milestones on that roadmap, and it brings the SEC one step closer to issuing guidance for management that has been lacking since the law was enacted in 2002.
At the Roundtable, the Commission learned from participants that while Section 404 has produced benefits, its implementation has been unduly costly. The Commission also received specific feedback about issues that remain to be addressed, and actions that the SEC and the Public Company Accounting Oversight Board could take to make the internal control assessment and auditing more efficient and more effective. A separate Advisory Committee on Smaller Public Companies reported, following a year-long study, that companies which have not yet undertaken the process have special concerns with both costs and procedures. The planned guidance for management which is the subject of the Concept Release is intended to assist in dealing with all of these issues and concerns.
posted by Brian Moran @ 3:44 PM