January 15, 2008
Smaller Non-Public Companies Have Higher Internal Control Standards than Smaller Public Companies
With all of the non-stop complaining about SOX 404, smaller public companies have received five years of delays on Section 404.
All during this time, the AICPA (American Institute of Public Accountants) was working on accounting standards regarding internal controls for NON-PUBLIC companies. These standards, SAS 107-112 require auditors to review internal controls over financial reporting for NON-PUBLIC companies. The affects companies with fiscal periods ending on or after December 15, 2006.
With the current deadline for public companies under 404(b) fiscal years on or after December 15, 2008 (possibly delayed to 2009), the public company standards are now lower than private companies. Interesting since internal controls are basic good business.
It is now difficult to make the case that smaller public companies cannot comply with ICFR standards when their private brethren will comply this year and be audited with a top down risk based approach.
Sound familiar? More detail on the unintended consequences of these delays can be reviewed in Lord Benoit's recent study.
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.
All during this time, the AICPA (American Institute of Public Accountants) was working on accounting standards regarding internal controls for NON-PUBLIC companies. These standards, SAS 107-112 require auditors to review internal controls over financial reporting for NON-PUBLIC companies. The affects companies with fiscal periods ending on or after December 15, 2006.
With the current deadline for public companies under 404(b) fiscal years on or after December 15, 2008 (possibly delayed to 2009), the public company standards are now lower than private companies. Interesting since internal controls are basic good business.
It is now difficult to make the case that smaller public companies cannot comply with ICFR standards when their private brethren will comply this year and be audited with a top down risk based approach.
Sound familiar? More detail on the unintended consequences of these delays can be reviewed in Lord Benoit's recent study.
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.
