When the House Financial Services Committee passed legislation including a provision that would exempt public companies with a market capitalization of less than $75 million from the requirements of Sarbanes-Oxley section 404(b), I was surprised. After all, the Securities and Exchange Commission told these companies they were out of time. The Commission, at least, would not be approving any further delays of 404(b) compliance.
But I know better. Anything can happen. For example, CFO.com's Sarah Johnson writes:
[A] key piece of legislation passed last week by the House of Representatives would give smaller companies yet another delay - or even a full exemption - from the requirement, as long as their market caps stay below a certain threshold.
If it becomes law, the Wall Street Reform and Consumer Protection Act of 2009 will require "a year-long delay for compliance, an exemption for the smallest of companies, and another study of the costs and benefits of full Sarbox compliance," Johnson explains.
But again, anything can happen. The Senate could strip the bill of those provisions when it gets the legislation next year, or modify them significantly. And of course, on the opposite end of the spectrum, the Supreme Court could decide that the Public Company Accounting Oversight Board, and by extension all of Sarbanes-Oxley, is unconstitutional.
Then Congress would have to start all over again.