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Former Senator Paul Sarbanes, D-Md., who, as the head of the Senate Banking Committee, co-authored the sweeping Sarbanes-Oxley reform act said he supports developing additional guidance for smaller filers but, not surprisingly, dismisses exempting those companies from compliance with the legislation’s rigid Section 404.

“Stop and think about that for a moment,” said Sarbanes in a speech before attendees at a conference on financial reporting and governance presented by Pace University’s Lubin School of Business, here. “That would mean that you would be exempting 80 percent of public companies from compliance.”

Sarbanes referred to recent pronouncements from the Securities and Exchange Commission and the Public Company Accounting Oversight Board regarding potential streamlining of the 404 internal controls provision, which small filers have complained is disproportionate to them in terms of cost and manpower.

WebCPA: SOX Co-Author Supports Tweaking Act, Not Exemption

As the SEC and PCAOB continue to revise their internal-control standards, what should small businesses do in the meantime? A few are asking senators for an extension.

More than 6,000 public companies face a serious dilemma about their Sarbanes-Oxley compliance: Should they use the current version of Section 404 now in reviewing internal controls over their financial reporting? Or should they wait until the Securities and Exchange Commission and Public Company Accounting Oversight Board issue final revisions later this year?

Decision time is approaching fast. Small businesses — or so-called non-accelerated filers — have until they file their 10-Ks for fiscal years that end on or after Dec. 15, 2007, to meet 404’s management assessment requirement. It’s a deadline that the SEC has extended several times, including that of the auditors’ attestation reports (non-accelerated filers don’t have to complete those documents until their 10-Ks are filed for fiscal years ending after December 15, 2008). And small-business advocates are hoping the SEC will extend those dates once again.

CFO.com: Could Small Biz Get Another Sarbox Reprieve?

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

This posting is sponsored by SOX Automation, Inc.

I had the pleasure to take part at the CPA High Tech Industries Conference for Financial Professionals together with my sponsor SOX Automation, Inc, at September 22th 2006.

A special thank you I like to send to Mark Jensen which is Partner & National Director, Venture Capital Services, at Deloitte & Touche LLP, for his program point: Impact of Sarbanes Oxley on Smaller Public Companies. He has given in his elaboration an deep insight about the problematics and cost explosions at smaller public companies. Our sponsor greatly appreciated also the recommendation for SOX Automation, Inc software SOX DISC®.

Especially his explanations of which steps should companies take now to ensure compliance with Sec 404 was very instructive.

Below you can see a picture, which shows me (on the left hand side) at the conference sponsor table of SOX Automation, Inc:

I found a really interesting report at RevenueRecongnotion.com which says that 92% of public companies are forced to rely on spreadsheets to fill vital gaps in their revenue reporting processes—despite the fact that spreadsheets are prone to errors, lack audit capabilities, and resist internal control.

The report “Enterprise Systems and Revenue Recognition: The Missing Link”can be found at here.

The Securities and Exchange Commission today issued two releases to grant smaller public companies and many foreign private issuers further relief from compliance with Section 404 of the Sarbanes-Oxley Act of 2002.The subjects are:

1. Ref from Section 404 Compliance Dates for Smaller Companies (Non-Accelerated Filers).

The Commission is proposing to grant relief to smaller public companies by extending the date by which non-accelerated filers must start providing a report by management assessing the effectiveness of the company’s internal control over financial reporting. The initial compliance date for these companies would be moved from fiscal years ending on or after July 15, 2007, until fiscal years ending on or after Dec. 15, 2007.

2. Relief from Section 404(b) Compliance Date for Certain Foreign Private Issuers.

The Commission is granting relief from Section 404(b) compliance for foreign private issuers that are accelerated filers (but not large accelerated filers), and that file their annual reports on Form 20-F or 40-F. These companies will have their compliance deadline extended for an additional year, so that they will not begin complying with the Section 404(b) requirement to provide an auditor’s attestation report on internal control over financial reporting in their annual reports until fiscal years ending on or after July 15, 2007.

3. Proposed Transition Relief for Newly Public Companies.

In the same release in which it proposes an extension of the Section 404 compliance dates for non-accelerated filers, the Commission also proposes a transition period for newly public companies.

Here you will find the press release of the SEC.