Handicapping Sarbox Reform
The Securities & Exchange Commission has been considering changes to Sarbanes-Oxley's Section 404 in order to relieve public companies from some of the burden of expensive internal audits. In May the SEC released tentative guidance, which experts are still sorting out. We asked three: Do you expect meaningful reform, and what might it look like?
"It is unlikely that there will be sweeping revision. Adjustments should be made to reflect a company's degree of maturity, and regulation of internal controls should be adjusted for different stages of development.
Ted Dintersmith Partner,
Charles River Ventures
"Chairman [Christopher] Cox has made it clear he views SarbOx as part of the evolution of the regulatory system. There will not be a major amendment, but there will be an effort to change the implementation of 404 to a risk-based approach that is particular to a company and its business systems.
Ralph De Martino
Co-chairman of the SEC registration
and regulation department and partner, Cozen O'Connor
"I am very pessimistic about getting reform. Whatever will happen will fall short of what small business needs, which is to be exempt from all of the provisions that impact the reassignment of capital.
National Small Public Company Leadership Council and
the Microcap Company Political Alliance Corp.
Edited by Jeremy Quittner