SEC Loosens SOX Audit Requirements
The SEC unanimously approved long-awaited guidelines designed to ease the burden on small companies of complying with Section 404 of SOX.
May 24, 2007 at 07:43 AM
1 minute read
The original version of this story was published on Law.com
The SEC unanimously approved long-awaited guidelines designed to ease the burden on small companies of complying with Section 404 of SOX.
“Congress never intended that the 404 process should become inflexible, burdensome and wasteful,” SEC Chairman Christopher Cox said in a statement. The new guidelines, Cox said, will enable companies to tailor their procedures for evaluating internal controls according to their circumstances, resulting in reduced compliance costs.
The new guidelines streamline the auditing process and direct public companies to focus on the areas most prone to fraud, One of the most significant provisions eliminates the requirement that companies hire outside auditors to evaluate the quality of their process for evaluating internal controls,
The SEC previously had delayed the effective date of Section 404 for companies with a market value of less than $75 million amid complaints that complying with the rules would be too costly for them. The compliance date is now Dec. 15.
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