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US to unveil concessions on accounting rules

US to unveil concessions on accounting rules

by Rick Turoczy on November 30, 2004

Regulators will unveil on Tuesday new concessions for US companies struggling to compile reports on their safeguards against fraud and bad financial reporting.

The Securities & Exchange Commission, the chief US financial regulator, is set to give more than 2,000 public companies with market capitalisations of between $75m and $700m extra time to prepare reports on their internal controls.

The companies are expected to be allowed to file the reports with the SEC up to 45 days after they send their annual reports to the regulator.

They were originally supposed to file their reports on internal controls alongside the annual reports.

Internal controls are meant to ensure good financial reporting as well as detect fraud, and US lawmakers made the reports on such safeguards mandatory for public companies in section 404 of the 2002 Sarbanes-Oxley legislation.

But section 404 has become the most expensive and challenging provision of the legislation for companies.

US to unveil concessions on accounting rules

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