The Securities and Exchange Commission took a step Wednesday toward easing Sarbanes-Oxley accounting requirements for small public companies. While the little guys have been complaining about the rules since 2002, when they were put in place after Enron’s collapse, legislators have not heeded their calls until now.
Among the biggest changes that the agency unanimously agreed to was allowing companies more flexibility with Section 404 of the law, which calls for strict internal controls and reporting requirements. The change would allow companies to assess their greatest risks rather than testing a long list of controls.
“Short of eliminating Section 404 for small business, this is probably the second best alternative in the current political environment,” says Nimish Patel, a partner at Los Angeles law firm Richardson & Patel LLP. Right now, firms worth less than $75 million don’t have to comply with that section until next year, but some small-business advocates say that the date should be pushed back even further.
Read more at the U.S. News and World Report blog, Small Biz Scene.