Center for Audit Quality Opposes Sarbox 404(b) Exemption for SMBs

Lora Bentley

Thursday morning I wrote about final action on the Senate's financial regulatory reform bill being delayed. Three more votes would have gotten Senate Democrats the 60 votes they needed to end debate on the bill.


With the votes so close, there's little doubt the measure will eventually pass, but the delay gives stakeholders more time to lobby for or against the amendments to, or other portions of, the bill they about which they feel strongly. The Center for Audit Quality and the Council of Institutional Investors are taking advantage of the opportunity.


In a letter to lawmakers, the groups urge defeat of amendments proposed by Sens. David Vitter, R-La., and Kay Bailey Hutchinson, R-Texas, that would exempt small public companies from Sarbanes-Oxley section 404(b) compliance requirements. They write:

Senator Vitter's amendment would permanently waive compliance for non-accelerated filers (companies with market capitalization of less than $75 million), resulting in little independent scrutiny of financial reporting safeguards at half of all listed companies...Senator Hutchison's amendment would go even further, by extending the exemption to companies with market capitalization of $150 million...


They argue that rolling back 404(b) compliance requirements for smaller companies would put investors in those companies "at a distinct disadvantage." They also note that smaller companies are no less at risk for fraud than their large enterprise counterparts.

Add Comment      Leave a comment on this blog post
May 21, 2010 2:45 AM SaidWhat SaidWhat  says:

What was the resolve on this when the Senate passed the bill last night.  Were either of these amendments included?

Jun 2, 2010 10:33 AM matt morris matt morris  says:

Finding customer specific requirements has long been a challenge. In fact, a survey of current automotive suppliers found that a significant number did not know where to go for the latest applicable customer specific requirements. For registrars and end users, this represents a serious problem. How can rules be followed and enforced if they are not readily available?

It is with these challenges in mind was created. Here you will find a community to access, share, and discuss customer specific requirements.

Please understand that the content of this site will take some time to develop as we work hand in hand with each of you to build a comprehensive database of the thousands of available customer specific requirements. We ask that you join us in our cause as we attempt to build something great for the common benefit of the quality community.


Apr 5, 2011 3:55 AM alex alex  says: in response to matt morris

"For registrars and end users, this represents a serious problem. How can rules be followed and enforced if they are not readily available?"

do you know if the issue was resolved?


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