WASHINGTON, D.C.—The U.S. Chamber of Commerce today applauded the Securities and Exchange Commission (SEC) for granting a one-year extension of Sarbanes-Oxley (SOX) Section 404(b) for small businesses.

 

“This is the right step to help small businesses as the SEC continues to make progress fixing the implementation of Sarbanes-Oxley,” said David Hirschmann, president of the Chamber’s Center for Capital Markets Competitiveness. “This delay will provide appropriate time for small businesses and their auditors to learn from the experience of larger companies as they comply with the re-drafted rules passed last year by both the SEC and the PCAOB.”

 

The implementation of Section 404 has led to costs and regulatory burdens far beyond what Congress intended and well in excess of the benefits to shareholders and management, according to the Chamber.

 

The Chamber submitted comments to the SEC and the Public Company Accounting Oversight Board (PCAOB) last year expressing concerns over continued ambiguity within SOX Section 404 and its harmful impact on smaller companies. It also released a report showing that, despite recent reforms, SOX Section 404 disproportionately burdens small businesses. The Chamber has also testified before the House Small Business Committee on the same subject calling for action and commented in strong support of this proposed delay.

 

Last May, the SEC and PCAOB took steps to reduce the burden of Section 404 compliance, but proper regulatory balance remains to be achieved. Companies, however, would have to begin engaging auditors and consultants now to ensure compliance with the original compliance date. 

 

The U.S. Chamber of Commerce is the world's largest business federation representing more than 3 million businesses and organizations of every size, sector, and region.

 

www.uschamber.com   

 

# # #