SEC to SMBs: What is it about NO that you don’t understand?
A fifth reprieve from Sarbanes-Oxley (SOX) does not appear likely for SMBs.
At a forum for small businesses, John White, the director of corporation finance for the U.S. Securities and Exchange Commission, said the SEC has no plans to extend the deadline for small business compliance with the internal controls requirements of Section 404 of the Sarbanes-Oxley (SOX) corporate finance law. White has been issuing this warning all summer, but some SMBs don’t seem to be listening.
In that same forum, White also promised that the SEC would introduce several rules by the end of the year aimed at making it easier for SMBs to comply with SOX, such as a relaxed process for issuing stock options.
Companies with less than $75 million in market capitalization have been granted four extensions on compliance since the law was passed by Congress in 2002 because small business advocates have warned that compliance is too pricey for them.
But another extension seems unlikely if you take White at his word. SMBs will have to be compliant by Dec. 15. At this week’s forum White said small public companies should be acting now to prepare compliance. But it’s worth noting that he is speaking for only the SEC.
“I would just urge all of you that are advising small companies that, at least from this building (the SEC), we are not anticipating any extensions,” White said, according to Reuters.
Note that he said “from this building.” He is speaking only for the SEC. In the world of Washington, D.C., where nuance is everything, that leaves some wiggle room. Congress could easily act again to extend the deadline if business interests like the U.S. Chamber of Commerce lobby hard enough. But time is running out. SMBs should probably be acting as if no fifth extension is coming. You should heed White’s warning.
Posted: September 26th, 2007 under Administrative, Industry news.
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