01 December 2004

Some SOX relief for smaller firms...

US companies with a market cap between $75 and $700 Million will get a 45 day extension for compliance with SOX (Sarbanes-Oxley Act of 2002). According to the SEC Statement:

The online statement quoted SEC Chief Accountant Donald Nicolaisen, saying: "The Commission is sensitive to resource constraints at accounting firms and at smaller public companies, and is taking this step to facilitate the successful and effective implementation of the Section 404 internal control requirements." Alan Beller, director of the Division of Corporation Finance, added that the exemption should "encourage companies to file important information for investors, including audited financial statements, on a timely basis, while providing an appropriate accommodation for internal control reports."

Eligible companies now have 45 days after the expiration of their 75-day reporting window to add the required management reports on internal controls, along with auditors' comments, the SEC said. The PCAOB's ruling allows auditors to sign off of internal reports at a later date than financial reports. The temporary rule is expected to be in effect until July 15, 2005.

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