Sarbanes-Oxley compliance delays for small business are a popular discussion topic among small business lobbyists. They won another victory early this year when the Securities and Exchange Commission made a section 404(b) compliance delay for non-accelerated filers official. And as I've pointed out before, it isn't the first delay the SEC has allowed. In fact, it's the third.

In an Investment News opinion piece on Tuesday, WithumSmith+Brown Global Assurance CEO Thomas A. Basilo says the commission has lulled small businesses to sleep with the repeated delays and extensions. Even though they've been given the extra time, not many are making wise use of it. And why should they? I imagine many of them are thinking, "Oh, it's not that important -- and chances are we'll get another extension anyway."

The delay isn't beneficial to the SMBs unless they actually use it for its intended purpose -- to better prepare for compliance. Since apparently the companies are not interested in doing so, Basilo says, the SEC should stop tiptoeing around the issue and "take a stand."

He offers two implementation plans as possible solutions:

The first:

Require Section 404(a) compliance annually. Require all non-accelerated filers to comply with Section 404(b) for years ending on or after Dec. 15, 2009. Non-accelerated filers that receive a clean opinion on the effectiveness of internal controls over financial reporting would need to comply with Section 404(b) only every three years. Companies that have material weaknesses would be required to comply with Section 404(b) until all material weaknesses were remediated, then could comply every three years.

The second:

Require Section 404(a) compliance annually. Make compliance with Section 404(b) optional for non-accelerated filers and permit filers to prominently display that they are 404-compliant. Basilo admits they're not perfect, but what plan ever is? Either one would at least be a step in the right direction.