December 12, 2007
One More Time: One Year Delay Proposed for Small Companies for SOX 404(b): Auditor Attestation
Well, they done it again. The SEC is proposing one more delay for small companies for the auditor attestation portion of SOX 404. That is 404(b). So this gives companies a breather to let the larger brethren to get Audit Standard #5 road tested.
But this means, look out when the Auditor Attestation occurs in 2009. The auditors will be there with full confidence. Time to get those risk control documents in order and test those controls and remediate as necessary.
Here is the detail so far from Market Watch:
"CAMBRIDGE, Mass., Dec 12, 2007 /PRNewswire via COMTEX/ -- The Committee on Capital Markets Regulation applauds SEC Chairman Cox's testimony proposing the delay of an additional year before requiring that small companies get external audits under Sarbanes Oxley Section 404(b), in order to complete what amounts to a cost-benefits analysis of that requirement. As we noted in our Interim Report of November 2006 and in our testimony in June 2007 before the U.S. House Committee on Small Business, Section 404 costs, averaging $4.4 million in the first year, have disproportionate impact on small companies.
Let's wait to see whether these costs are substantially reduced by the SEC's and PCAOB's recent Section 404 reforms before applying them to small companies. Unreasonable 404 costs will either prevent small private companies from going public, or drive them abroad to do so. Indeed, our December 4th report on The Competitive Position of the U.S. Public Equity Market found that through the first three quarters of 2007, a remarkable 9.2% of U.S. companies did their IPOs only abroad. "
If your company has to comply with SOX 404 or NI 52-109, and wants to do it in a sensible and cost effective way, contact http://www.issuescentral.com/ for more information on Compliance Playbook® for companies based outside of Canada. For Canadian based companies, see http://www.compliancepartner.ca/ for more information on Compliance Partner™ from Thomson Carswell.
But this means, look out when the Auditor Attestation occurs in 2009. The auditors will be there with full confidence. Time to get those risk control documents in order and test those controls and remediate as necessary.
Here is the detail so far from Market Watch:
"CAMBRIDGE, Mass., Dec 12, 2007 /PRNewswire via COMTEX/ -- The Committee on Capital Markets Regulation applauds SEC Chairman Cox's testimony proposing the delay of an additional year before requiring that small companies get external audits under Sarbanes Oxley Section 404(b), in order to complete what amounts to a cost-benefits analysis of that requirement. As we noted in our Interim Report of November 2006 and in our testimony in June 2007 before the U.S. House Committee on Small Business, Section 404 costs, averaging $4.4 million in the first year, have disproportionate impact on small companies.
Let's wait to see whether these costs are substantially reduced by the SEC's and PCAOB's recent Section 404 reforms before applying them to small companies. Unreasonable 404 costs will either prevent small private companies from going public, or drive them abroad to do so. Indeed, our December 4th report on The Competitive Position of the U.S. Public Equity Market found that through the first three quarters of 2007, a remarkable 9.2% of U.S. companies did their IPOs only abroad. "
If your company has to comply with SOX 404 or NI 52-109, and wants to do it in a sensible and cost effective way, contact http://www.issuescentral.com/ for more information on Compliance Playbook® for companies based outside of Canada. For Canadian based companies, see http://www.compliancepartner.ca/ for more information on Compliance Partner™ from Thomson Carswell.
