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

3 Comments
  1. Joe Haggard says

    If these companies aren’t compliant with SEC thy should have to disclose that to the stockholders though. maybe that’s part of th agreement

  2. Mike Gould says

    This extension will help, but more importantly we need more clear guidelines to comply.

  3. Tantalus says

    It’s nice that the SEC is willing to give small companies more time, but it’s imperative that they don’t let leniency prevent the regulations from ultimately being enforced.

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