The U.S. Securities and Exchange Commission announced it has begun a cost-benefit study of an upcoming attestation requirement for small businesses under Section 404(b) of Sarbanes-Oxley. Section 404(b) requires an auditor's attestation on management's assessment. The agency also proposed a one-year extension of the Section 404(b) requirement for smaller companies. This delay doesn't mean companies need to be lax in compliance to Sarbox. Read Lora Bentley's article on making this extension work to your favor.
Smaller companies may be able to breathe a little easier now that they don't have to worry about external auditors checking out their internal controls until 2009. However, the delay doesn't mean they should sit back and do nothing.
Small Business Times writer William Gienke says small public companies should take advantage of the extra year the Securities and Exchange Commission has given them to fine-tune their internal controls and make sure their assessments are accurate before subjecting them to third-party scrutiny.
Moreover, he says that even private companies and non-profit organizations will benefit from the lessons small businesses learn as they come into compliance with Sarbanes-Oxley. What has been regulated for public companies is simply good business for others.
Lora is an attorney and journalist who covers regulatory and legislative issues for IT Business Edge's Managing Compliance Standards weekly report. Read her blog, Sarbox Survival Guide, to keep up to date on audit and governance steps to manage the compliance maze and actually improve business.
