SOX Center

Commissioners of the government’s watchdog for Wall Street will face questions about their efforts to protect investors and oversee markets during a House hearing on Tuesday.

Members of the House Financial Services Committee will line up Tuesday afternoon to ask Securities and Exchange Commission Chairman Christopher Cox and the four other SEC commissioners about the agency’s activities in a range of different areas at an oversight hearing.

“There are enough issues that the SEC is working on that we wanted to have a full, wide-ranging discussion,” said Steve Adamske, a committee spokesman.

Among those issues are the agency’s implementation of accounting rules under the Sarbanes-Oxley Act, its oversight of hedge funds, its enforcement policies, private securities litigation and access to proxy ballots.

MarketWatch:SEC commissioners to go before House panel

Jack Ciesielski submits: CFO.com reports that Senators John Kerry (Massachusetts) and Olympia Snowe (Maine) have sent another letter to SEC Chairman Christopher Cox requesting further delay in the implementation of the Sarbanes-Oxley Act’s Section 404 for small companies.

It’s deja vu all over again: they sent a letter to him last February on the same subject.

Here’s a link to the letter. The senators didn’t ask for a specific extension - but wanted an answer from Chairman Cox in 30 days. Last time, the specifically asked the SEC to give small firms until the end of 2008 to have management report on their internal controls, and another year afterwards for the auditors to report on the same.

Yahoo.com: The Protected Class: Senators’ Request For Sarbox Delay - Part II

The two top members of the House Small Business Committee asked regulators on Monday how much newly approved revisions to the Sarbanes-Oxley Act would save small companies, with the panel’s chairwoman saying a hearing about the law last week yielded only promises, not estimates.

In letters to Securities and Exchange Commission Chairman Christopher Cox and Public Company Accounting Oversight Board Chairman Mark Olson, Small Business Committee Chairwoman Nydia Velázquez, D-N.Y., and top panel Republican Steve Chabot, R-Ohio, asked for clarification about whether the SEC has developed cost estimates associated with changes to the 2002 corporate-governance law.

The letters follow a June 5 hearing about the law in the committee, and the adoption by the SEC and the accounting board of new guidance that will allow for focused checks on “internal controls” over financial reporting — the policies and procedures companies use to catch potential fraud on their books.

MarketWatch: Regulators asked for Sarbanes-Oxley costs

John Kerry and Olympia Snowe want another delay for small companies.

Senators John Kerry and Olympia Snowe have sent another letter to Securities and Exchange Commission chairman Christopher Cox asking him to give small companies more time to prepare for complying with the internal-control provisions of the Sarbanes-Oxley Act.

The small-business committees in both the House and Senate have recently met with Cox and Public Company Accounting Oversight Board Chairman Mark Olson to go over how the revised management guidance and corresponding new auditing standard for internal control over financial reporting address the concerns of small businesses. Those companies with a market capitalization of less than $75 million must include 404 management reports starting with their 10-Ks filed on or after December 15, 2007 and auditor-attestation reports one year later.

CFO.com: Senators Urge SEC to Delay 404, Again

The U.S. Securities and Exchange Commission approved new guidance on Wednesday to help companies comply with what critics say is a burdensome and costly provision of the Sarbanes-Oxley corporate reform law.

The agency, by a 5-0 vote, encouraged companies to take a more risk-based approach to complying with Section 404 of the legislation.

“Congress never intended that the 404 process should become inflexible, burdensome and wasteful,” SEC Chairman Christopher Cox said at the agency’s open meeting.

Section 404 requires companies to assess their internal controls over financial reporting. It also calls for external auditors to report on management’s assessment and on the controls themselves.

Corporations and business lobbyists have complained that Section 404 was too expensive and the SEC has conceded that, in some cases, overly cautious companies caused the law’s costs to exceed its benefits.

Yahoo!Finance: SEC adopts new guidance for Sarbanes-Oxley

Securities and Exchange Commission Chairman Christopher Cox isn’t ruling out further delays in applying stricter accounting requirements on small public companies but said such relief isn’t the option preferred by regulators.

About 6,000 smaller public companies have yet to come under two requirements adopted by Congress in 2002 as part of the Sarbanes-Oxley Act, calling for companies to make an annual assessment of their internal financial-reporting controls, with further review by the company’s outside auditor. Regulators have delayed applying that portion of the law to smaller companies amid complaints that compliance has been very costly and time-consuming for larger companies. In response to such complaints, the SEC and Public Company Accounting Oversight Board are working to make the requirement less burdensome for all companies.

SmartPros: SEC Chairman: Sarbanes-Oxley Relief for Small Firms Not First Choice

BIO Reiterates Support as Senate Small Business Committee Considers Changes

WASHINGTON–(BUSINESS WIRE)–As Securities and Exchange Commission (SEC) Chairman Christopher Cox and Public Companies Accounting Oversight Board (PCAOB) Chairman Mark Olsen prepare to testify before the Senate Committee on Small Business & Entrepreneurship today, BIO reiterated its support for changes to the Sarbanes-Oxley Act of 2002 (SOX) that will specifically benefit small biotech companies.

“The biotechnology industry was particularly hard-hit by the complex and burdensome regulations imposed by SOX’s Section 404. We have supported changes to its implementation, so our companies can refocus on our most important mission of researching and developing new therapies to improve human health, expand our food supply, and provide new sources of energy,” said BIO President and CEO Jim Greenwood. “We are pleased to see that agency and congressional leaders are listening.”

Yahoo!Finance: Biotech Research and Development Will Benefit from Sarbanes-Oxley Changes

The American Bankers Association has asked securities regulators to continue exempting smaller public companies from stricter accounting requirements adopted by Congress in 2002, deferring application for another two to three years.

In a letter Monday to Securities and Exchange Commission Chairman Christopher Cox, the banking trade group said it “strongly urges” smaller companies remain exempt from requirements to assess internal financial-reporting controls, have them reviewed by their outside auditor, and report major flaws to investors and regulators.

Senate Small Business Committee Chairman John Kerry, D-Mass.; House Small Business Committee Chairwoman Nydia Velasquez, D-N.Y.; and the senior Republicans on those panels, Sen. Olympia Snowe, R-Maine, and Rep. Steve Chabot, R-Ohio, are in strong support of such a delay, as is the Small Business Administration, according to the ABA.

Dow Jones Newswires: Bankers Assn Seeks Continued Small-Business Exemption

Some Accuse SEC of Pushing Accounting Board, Tilting to Business in Rules Process

Complaints are rising that the Securities and Exchange Commission is muscling an accounting oversight board in a tilt toward business interests as the two agencies fashion rules for public companies and auditors under a landmark anti-fraud law.

In recent months the SEC and the independent board that supervises the accounting industry have taken differing approaches toward the key part of the Sarbanes-Oxley law that arose from the 2002 corporate scandals: the requirement for companies to assess the strength of their internal financial controls and to fix any problems.

SEC Chairman Christopher Cox urged, in a letter to the Public Company Accounting Oversight Board last fall, that it revise its rules for outside accountants under the requirement to adapt them to the size of the company whose books are being audited.

Yahoo!:SEC Accused of Muscling Accounting Board

Phoenix, a new computer system, should simplify tracking, collecting, and distributing billions of dollars of penalties, says Chairman Cox in his budget statement.

The Securities and Exchange Commission is creating a new office dedicated to disbursing money to investors harmed in securities-fraud cases.

Under the Sarbanes-Oxley Act of 2002, the SEC became the fund holder for the disgorgement and fines it collects in such cases. While the regulator has done a good job of collecting and putting aside the cash, it has fallen behind with getting the money back to harmed investors, according to SEC chairman Christopher Cox. On Tuesday, Cox acknowledged that “too much money is still undisbursed.”

The commission has struggled in identifying claimants and keeping track of the funds, according to Cox. As a result, the SEC is creating the new office and a new computer system, he said during a Congressional appropriations meeting where he discussed President Bush’s proposed $905 million allotment for the SEC’s 2008 budget.

CFO.com: SEC Unit Eyes Swifter Fraud Payouts