July 11, 2006
SEC Issues Concept Release Concerning SOX 404 - Management's Reports On Internal Control Over Financial Reporting
The SEC issued a Concept Release (click here) related to SOX 404 seeking comments from the public with respect to providing additional guidance to management regarding its evaluation and assessment of internal control over financial reporting (ICFR).
The comments are requested within the next 60 days and will help the SEC as it seeks to put together formal guidance for management teams later this year with respect to SOX 404.
Why are they doing this? Well, the AS2 standard meant for the external auditor has become something of a default for management teams as they understand how best to address the ICFR objective of accurate financial reporting (and as a result improve investor confidence in the capital markets - the SEC's primary concern).
I can't wait to read some of the comments that the SEC receives. A veritable "loot bag" of vested interests.
Well, I'll give you one of my general comments in advance.
"To the SEC: Be steadfast and maintain the highest financial standards in the world. Help the industry to do it in a cost-effective way, and don't listen to the Chicken Littles that talk about the U.S. losing competitiveness in financial markets because of having higher standards (and many would agree higher compliance costs). You are also supported by higher market premiums and greater truth in financial reporting. That will allow the U.S. to maintain long-term competitiveness and greater investor confidence than other markets."
Ah, that felt good.
The comments are requested within the next 60 days and will help the SEC as it seeks to put together formal guidance for management teams later this year with respect to SOX 404.
Why are they doing this? Well, the AS2 standard meant for the external auditor has become something of a default for management teams as they understand how best to address the ICFR objective of accurate financial reporting (and as a result improve investor confidence in the capital markets - the SEC's primary concern).
I can't wait to read some of the comments that the SEC receives. A veritable "loot bag" of vested interests.
Well, I'll give you one of my general comments in advance.
"To the SEC: Be steadfast and maintain the highest financial standards in the world. Help the industry to do it in a cost-effective way, and don't listen to the Chicken Littles that talk about the U.S. losing competitiveness in financial markets because of having higher standards (and many would agree higher compliance costs). You are also supported by higher market premiums and greater truth in financial reporting. That will allow the U.S. to maintain long-term competitiveness and greater investor confidence than other markets."
Ah, that felt good.
