SOX Center

The US Senate’s thumping defeat of an amendment to exempt certain small and medium-sized businesses (SMBs) from compliance with Section 404 of the Sarbanes-Oxley Act is bad for business US poiticians have declared.

SMBs fell foul of political battles by those decrying the amendment as an attack on shareholder protections and others countering that SOX is crippling American businesses and preventing them from competing in a global economy.

The amendment, would have made compliance with Section 404 optional for companies with total market value of less than $700 million.

The political posturing doesn’t mean much for small and medium-sized businesses (SMBs), analyst Michael Rasmussen said. For less heat and more light on the requirements of the law, publicly traded SMBs will have to wait another month or so for the U.S. Securities and Exchange Commission and its partner in compliance, the Public Company Accounting Oversight Board (PCAOB), to approve their long-promised revised guidelines and new accounting rules.

“I think it’s par for the course now that SOX is here to stay,” said Rasmussen, who covers compliance at Forrester Research Inc. in Cambridge, Mass. “The SEC and PCAOB are working to more tightly define the scope of SOX. That is where companies will find the relief.”

ComputerWeekly: Sarbanes-Oxley defeat blow for SMBs

New legislation recently introduced in the US Senate aims to ensure that Sarbanes-Oxley Act regulations due to take effect in June do not disproportionately impact the nation’s small businesses.

The Small Business Regulatory Review Act of 2007 would require the Securities and Exchange Commission (SEC) and Public Company Accounting Oversight Board (PCAOB) to take into account the burdens of small businesses before issuing final Sarbanes-Oxley rules.

Provisions in the Small Business Regulatory Review Act of 2007 would require: the SEC to conduct a small business analysis before the SEC and PCAOB publish final rules on small business internal control compliance; the SEC to publish a small business compliance guide explaining the SEC’s final rules in non-technical language; and the Government Accountability Office to assess the impact of the SEC’s final rules on small public companies two years after they are published.

“The Small Business Regulatory Review Act of 2007 will help to ensure that small stock companies do not suffer from additional unintended consequences that harm their ability to compete, innovate, grow, and, most importantly, create jobs,” stated Olympia J. Snowe (R-ME), Senate Small Business and Entrepreneurship Committee Ranking Member, who introduced the bill. “Our nation’s small stock companies are the cornerstone of our entrepreneurial economy, and it is essential that we carefully address the regulatory barriers that impede their growth.”

Investorsoffshore: Snowe Bill To Mitigate Sarbanes-Oxley Impact On US Small Firms