That noise you’re hearing? It’s a collective sigh of relief from small companies everywhere.
The SEC is giving small businesses — those with market capitalizations of $75 million or less — an extra year to comply with the auditor attestation requirement in Section 404(b) of the Sarbanes-Oxley Act. That means the attestation reports must appear in small businesses’ annual reports for fiscal years that end on Dec. 15, 2009 or later.
The SEC also has been given the green light to study the impact that complying with Section 404 is having on small businesses. “Companies, especially small ones, have consistently complained that the costs to comply are unreasonably high,” writes CFO.com’s Stephen Taub. “Most small companies vigorously dispute the SEC’s original assertion that compliance should cost them an average of $91,000 in their first year of compliance.”
The SEC expects the results of its study to be released sometime during the extension period.