SOX Center

Small public companies nationwide now face major Sarbanes-Oxley (SOX) compliance headaches. The root of their discomfort is the Securities and Exchange Commission’s (SEC) controversial yet unanimous decision on May 23 not to extend the SOX compliance deadline for companies with less than $75 million in market capital.

Fortunately for small business CEOs and CFOs, renewed peace of mind could be as simple as making a couple of two-day trips to Las Vegas or Orange County.

Well, it’s maybe not that simple. The solution isn’t a couple of weekends partying in ‘Vegas or two trips to the Magic Kingdom. Instead, DG Keeton Resources invites small business executives to lock themselves in for an intensive four-day SOX training conference to be held over a pair of two-day sessions during August and September.

Yahoo!: Small Public Companies Can Receive Valuable Sarbanes-Oxley Compliance Guidance During Intensive Four-Day Conferences

Senators John Kerry (D- Mass.) and Olympia J. Snowe (R-Maine) outlined specific steps the Securities and Exchange Commission (SEC) should take to provide more time and assistance to small public companies to comply with Sarbanes Oxley internal control regulations. Kerry and Snowe, as Chairman and Ranking Member of the Committee on Small Business and Entrepreneurship, have been closely following the impact of Sarbanes Oxley compliance on small public companies worth less than $75 million.

“Small public companies still face higher costs than large firms and deserve more time to comply with the recent changes to Sarbanes-Oxley. The regulations issued by the SEC last month are an important step, but I again strongly urge the SEC to give small public companies additional time to comply with Sarbanes-Oxley and to find additional ways to reduce their regulatory burden” said Kerry.

Yahoo: Kerry, Snowe Call on SEC to Give Small Firms More Time, Assistance to Comply With Sarbanes Oxley

The financial burden of Sarbanes-Oxley Act (SOX) compliance is slowly, but surely starting to ease.

The cost of compliance with Section 404 of the SOX declined by 23% in fiscal 2006, according to a survey by Financial Executives International.

The Florham Park, New Jersey-based organization found the average company spent $2.9 million on SOX compliance in 2006, versus $3.8 million in 2005 and $4.5 million in 2004.

“Technology has a lot to do with the cost reduction,” said Sanjay Anand, chair of the Sarbanes-Oxley Institute. Public companies “are actually automating their controls. A good 20 to 30%, even as much 40%, of the cost reduction is actually coming from automated controls rather than manual controls.”

These cost reductions have come despite the fact that auditors’ fees have remained relatively steady, the research revealed. External auditor fees dropped by just 11% in 2006, from $1.35 million to $1.2 million.

ComputerWeekly: Sarbanes-Oxley compliance costs drop, better processes credited

To help CFOs of smaller companies navigate wisely through the Sarbanes-Oxley compliance process, Lord & Benoit has published a study, “10 Threats to SOX Compliance for Smaller Public Companies.”

The study comes on the heels of actions by the SEC and PCAOB to require smaller public companies to comply with SOX this year.

In summarizing the results, Lord & Benoit suggests this list should be used by CFOs as a starting point for a macro-level risk assessment at smaller public companies. Identifying potential concerns, developing action plans to remediate these risks, and taking quick action can minimize the likelihood of an adverse Section 404 report at the end of the first year of compliance.

SmartPros: Study Outlines SOX Threats for Smaller Public Companies

Sarbox ‘no longer makes sense from a cost and administrative perspective’ says chemical giant’s CFO as ICI prepares to leave New York Stock Exchange.

ICI is gearing up to leave the New York Stock Exchange to free itself from the blight of Sarbanes-Oxley compliance.

The company predicted a £4m annual saving from the de-listing based on the costs ‘incurred using external suppliers and auditors to provide ongoing support to the company’s Sarbanes-Oxley compliance’.

Alan J Brown, ICI’s CFO said: ‘ICI will continue to comply with the Combined Code on Corporate Governance and the UK Listing Authority listing rules and maintain quarterly reporting. However, it no longer makes sense from a cost and administrative perspective to submit to the reporting obligations under the Exchange Act.

AccountancyAge: £4m-a-year Sarbox millstone forces ICI to abandon US listing

FEI announced the results of its sixth Sarbanes-Oxley compliance survey, which found that Section 404 compliance cost Corporate America less in year three of adoption than in each of the first two years. FEI polled 200 companies to gauge experiences in complying with Section 404. Responding companies have average revenues of $6.8 billion.

According to the FEI survey, which included 172 “accelerated filers”— companies with market capitalizations above $75 million — total average cost for Section 404 compliance was $2.9 million during fiscal year 2006, which represents a 23 percent decrease from 2005 totals. The data also shows reductions in internal and external costs of compliance, with internal staff time decreasing by 10 percent. The lower costs can be attributed to companies’ increased efficiencies in complying with Section 404.

FEI Survey: Management Drives Sarbanes-Oxley Compliance Costs Down, But Auditor Fees Virtually Unchanged

A new report into reporting and forecasting processes in European companies offers suggestions for improvement

What are the hot topics that finance directors are facing this year? In short, it’s people, performance and processes, in that order, according to recent research by BPM International, a network of business performance management consultancies, the UK arm of which is Paragon Consulting.

The research questioned group FDs, financial controllers and planning managers in more than 130 European businesses, the bulk of which had revenues in excess of (euro) 1bn. It found that people pipped performance as the agenda-topping issue: improving the skills and capabilities of finance staff was regarded by 81% of the companies taking part in the survey as a ‘hot topic’ for 2007, just slightly ahead of the need to improve performance (80%).

People issues feature in the business units as well as the corporate centre, the research found, adding that 72% of respondents ranked ‘operational excellence in the finance function’ as a priority. But with such a high proportion chasing after excellence, the report authors said it was “astonishing how many companies have still not managed to get their basics right”. Moreover, the research unearthed the fact that there is a high potential for improvement in many businesses.

Performance management, predictably enough, was almost equally high, but further investigation by the researchers suggests that corporate performance is still not good enough: the blame would appear to lie with “external distractions” such as the demands of Sarbanes-Oxley compliance, IFRS and, for financial services groups, Basel II.

AccountancyAge: FDs tackle reporting processes

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?

Richard Wasielewski, Nortech Systems, Inc. (NASDAQ:NSYS) vice president and chief financial officer, testified Wednesday before a U.S. Senate Committee on Small Business and Entrepreneurship that Sarbanes-Oxley (SOX) regulatory requirements have both helped Nortech improve its internal controls and financial reporting practices but also that the new requirements have added considerably to the company’s costs.

Wasielewski appeared before the committee at the invitation of U.S. Senator Norm Coleman (R-Minn.), to address the significant time and money small public companies, such as Nortech Systems, invest in Sarbanes-Oxley compliance.

The hearing preceded the introduction of new legislation, The Small Business Regulatory Review Act of 2007 (S.1153), the following day by Senate Small Business and Entrepreneurship Committee Ranking Member Olympia J. Snowe (R-ME) and Senator Coleman. The new legislation would require the Securities and Exchange Commission (SEC) and Public Company Accounting Oversight Board (PCAOB) to take into account the burdens faced by small businesses before issuing final Sarbanes-Oxley rules and ensure that SOX regulations due in June 2007 do not disproportionately impact the nation’s small publicly traded companies

Broadcast Newsroom: Nortech Systems’ CFO Testifies on Sarbanes-Oxley Reform

Fuwei Films (Holdings) (Nachrichten) Co., Ltd. (”Fuwei Films” or the ” Company”) announced the appointments of Ms. Cindy Lu and Dr. Zhibing Qian as Senior Vice Presidents.

Xiaoan He, CEO and Chairman of Fuwei Films stated that, “We are pleased to have new members join our management team. Ms. Lu will take full charge of investor relations, investment and financing, as well as Sarbanes-Oxley compliance while Dr. Qian will be responsible for operations and business development.

Mr. He also announced that on May 16, 2007, the management will present at Roth Capital Partners’ China Discovery Tour held at the Portman Ritz Carlton Hotel in Shanghai. Ms. Lu will be the speaker on behalf of the Company at this conference.

Finanznachrichten: Fuwei Films Announces New Senior Management Appointments