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Kerry, Snowe Urge Sarbanes-Oxley Extension for Small Firms

Kerry, Snowe Urge Sarbanes-Oxley Extension for Small Firms

by Toby Lucich on February 27, 2007

Today Senators John Kerry (D-Mass.) and Olympia J. Snowe (R-Maine) called for a delayedimplementation of the Sarbanes-Oxley Section 404 requirements for small public firms to ease the burden on complying with the expected new auditingstandards. Section 404 requires firms to establish internal control frameworks and to file internal control reports. The Securities andExchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB) proposed rules and guidance late last year addressing this sectionand are accepting public comments through Monday, February 26th.

"We can have strong corporate accountability standards while also reducing the burden for small firms who spend more time and money earnedthan big companies to comply with Sarbanes-Oxley," said Kerry. "We must do everything possible to appropriately reduce red tape in order for smallfirms to grow and become dynamic public companies."

A recent Government Accountability Office (GAO) report requested by Senators Snowe and Mike Enzi (R-Wyo.) found that small public companiesspend considerably more on implementing Sarbanes-Oxley, particularly Section 404. The report found that firms with less than $75 million inmarket capitalization were spending 877 percent more than larger counterparts -- $1.14 in audit fees per $100 of revenue, compared to just$.13 per $100 for firms with greater than $1 billion in market capitalization.

Kerry, Snowe Urge Sarbanes-Oxley Extension for Small Firms

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