SOX Center

U.S. accounting overseers voted Thursday to streamline rules for auditors’ assessments of corporate financial statements, in a move that supporters say will save time and simplify burdens imposed by the 2002 Sarbanes-Oxley Act.

By unanimous vote, the five members of the Public Company Accounting Oversight Board approved a new standard directing accounting companies to focus their audits of internal financial controls on the most important risks.

Under Section 404 of the Sarbanes-Oxley Act, public companies are required to test and report their procedures for catching financial misstatements and fraud. The law was approved in the wake of accounting scandals that brought down companies like Enron and WorldCom.

But Section 404 of the act came in for heavy criticism from companies who said it cost large amounts of time and money by requiring extensive and sometimes unnecessary checks on financial reporting. It’s also been the cause of hang- wringing among some lawmakers and experts who claim it’s partly responsible for making U.S. capital markets less attractive to foreign companies, who fear the heavy compliance burden of the law.

Nasdaq: UPDATE: Accounting Board Streamlines Sarbanes-Oxley Rules