SEC Gives Smaller Public Companies a Six-Month Extension To Comply with Section 404 of Sarbanes-Oxley
The Securities and Exchange Commission (SEC) has given the smallest public companies extra time to comply with the final portion of Sarbanes-Oxley. The extension will apply to companies with a public float below $75 million.
Such small companies must now begin complying by June 15, 2010, with a provision in the law, known as section 404, requiring them to report on the effectiveness of their internal controls. Previously, the companies were to begin complying by December.15, 2009.
The SEC said it decided on the extension after issuing a new study on the compliance costs of the change, which it indicated the smallest companies would need time to review.
SEC Chairman Mary Schapiro said that this would be the last extension: “Since there will be no further commission extensions, it is important for all public companies and their auditors to act with deliberate speed to move toward full Section 404 compliance.”
—Dillon Taylor, Assistant Chief Counsel