Well, we'd heard that Sen. Scott Brown's (R-Mass.) win over Martha Coakley to fill the U.S. Senate seat left vacant by Sen. Edward Kennedy's passing would likely throw a wrench in plans to pass health care reform quickly. Brown's victory means Democrats no longer have a super-majority in the Senate. But last week Compliance Week editor Matt Kelly wrote that Brown's election might also mean small businesses will have to deal with Sarbanes-Oxley 404(b) compliance after all.
Late last year, the U.S. House of Representatives passed legislation that would exempt the smallest public companies from, or delay again, compliance with the auditor attestation provision of Sarbanes-Oxley. The Senate has yet to act on its version of financial reform legislation, and Kelly says Brown's presence makes passage of such legislation "much less likely," at least this year.
[I]f a Section 404(b) exemption gets inserted into the [Senate] bill...and the Senate reconciles its bill with the House bill, and the 404(b) exemption survives that process, and both chambers then vote in favor of the full bill, and the president signs it into law - all this assumes Washington doesn't have other demands on its time, like starting over with healthcare legislation, or cutting the deficit, or running for re-election.
Without legislation on an exemption, the Securities and Exchange Commission's June 15, 2010, compliance deadline will arrive and small businesses will have no choice but to file auditor attestations, which Kelly says, "they'll flunk anyway because none of them have been preparing for it."
Given all this, Kelly wonders whether the Securities and Exchange Commission will about-face on its previous position and allow another compliance delay.
It's definitely food for thought.