In response to widespread criticism of the cost and burden of implementing Section 404 of the Sarbanes-Oxley Act of 2002, on internal controls, the Committee of Sponsoring Organizations of the Treadway Commission has issued comprehensive guidance and principles that should help smaller companies comply.In a July Webcast that introduced the new guidance, COSO chairman Larry Rittenberg emphasized that it does not specify prescriptive solutions to internal control problems.

"This guidance is principles-based," Rittenberg said. "In other words, management must make decisions on the most effective way to implement controls to achieve the internal control objectives. There are alternative ways to get to the right set of controls to achieve a particular objective ... . So this guidance is just that: guidance, not a cookbook. Management still needs to make decisions."

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