Permanent Exemption to Financial Controls Audit: One Step Closer
By David Feldman at 16 December, 2009, 12:49 pm
As mentioned in a prior entry, the Congress is weighing legislation that, among other things, will provide for a permanent exemption from smaller reporting companies (under $75 million market capitalization) to do an external (expensive) audit of their internal financial controls, as currently required by larger companies under the Sarbanes-Oxley Act of 2002.
The PIPE Wire has confirmed what seemed true from other reports, that this permanent exemption has now passed the full US House of Representatives as part of the overall financial services reform package approved last week. Of course this still has to get through the Senate and then conference before a final bill is passed and sent for the President’s signature. But we are one step closer to eliminating the most burdensome and costly aspect of Sarbanes. This exemption would still require companies to create and maintain appropriate controls, and for management to attest in each public filing that they are satisfied with the controls. But avoiding that cost and hassle would be a huge relief for thousands of smaller companies. Keep those fingers crossed!
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