On Wednesday, the Securities and Exchange Commission voted to approve new guidelines for Sarbanes-Oxley section 404 implementation for small businesses (with a market value below $75 million), according to JURIST. As promised, they allow companies to "focus on areas more prone to potential fraud" when evaluating their internal controls.
Following the SEC's vote, the Public Company Accounting Oversight Board added its approval to the new guidelines on Thursday, Market Watch reports. The board approved a new accounting standard that will complement the new SEC guidelines, simplify audits and generally cut out unnecessary work, the story says. The standard calls for audits to be scaled according to a company's size, for example.
In an interview with IT Business Edge, Brian Cleary, marketing VP for compliance software vendor OpenPages, had this to say about the changes:
With the new guidance and standards from the SEC and PCAOB, organizations should be able to reduce effort, complexity and related costs for SOX compliance. This is particularly true for companies that use technology to optimize the available efficiencies offered by the new rules, as long as the software solution supports a comprehensive risk assessment process that will enable management to assign relative risks to financial reporting processes and identify high risk areas for testing.