Companies Subject to Sarbanes-Oxley Get Early Christmas Gifts

Lora Bentley

In this season of giving, the Securities and Exchange Commission and the Department of Justice did what they could last week to ease the burden on U.S. public companies -- and some foreign firms as well.


Early last week, the Department of Justice issued new guidance on prosecuting criminal corporate fraud cases. The Seattle Post-Intelligencer reports that the guidelines prohibit harsher penalties against companies that refuse to give prosecutors access to attorney-client privileged information or that shoulder the legal fees incurred by their employees during an investigation.


And, as we've mentioned in a previous post, the SEC voted last Wednesday to make implementation of Sarbanes-Oxley section 404 more risk-based and to reduce the complexity (or redundancy, according to some) of the audits that must be completed by external auditors.


Last Friday, according to The Washington Post, the independent regulator also extended the Sarbanes-Oxley compliance deadline for companies with less than $75 million in market capitalization. Before, the smallest public companies would have been required to report on the status of their internal controls for fiscal years ending July 15, 2007. Now, those same companies will not file their first reports until fiscal years ending Dec. 15, 2007.


And if that isn't enough, Chase Cooper reports that the SEC has also proposed making it easer to delist for foreign companies that are listed on U.S. stock exchanges -- and thereby subject to Sarbanes-Oxley. Overseas companies with average daily trading volumes in U.S. markets that are less than 5 percent of trading volumes in their home countries can leave the U.S. exchanges.

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