SEC reconsiders Sarbanes-Oxley
TEXT OF STORY
SCOTT JAGOW: Perhaps your company’s been squeezed by the Sarbanes-Oxley accounting rules. They’re designed to prevent an Enron-type disaster, but a lot of smaller businesses have complained the regulations are too expensive. Well, today the SEC considers easing up a little.John Dimsdale has more from Washington.
JOHN DIMSDALE: Smaller public companies say they can’t afford the Sarbanes-Oxley requirement that all financial and accounting procedures be reviewed by an outside auditor every year.
The U.S. Chamber of Commerce’s David Chavern says the annual reports can run into tens of thousands of dollars.
DAVID CHAVERN: What you get with smaller public companies is a tremendous fear they’re going to be saddled with a lot of costs that are going to take away from their operational flexibility.
The SEC is likely to reject a wholesale exemption for small companies and instead allow those worth less than $700 million to file shorter audits.
But Thomas Lys, an accounting professor at Northwestern University, worries about a two-tiered regulation.
THOMAS LYS: If there is a large cost differential between the big companies and the small companies, companies will try to think, well should I break up? And regulations shouldn’t be doing that.
The SEC will take public comments before issuing its final proposals next spring.
In Washington, I’m John Dimsdale for Marketplace.
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