House Financial Services Committee Chairman Barney Frank, D-Mass., said he anticipates an exemption for small and midsized public companies from Sarbanes-Oxley Section 404(b) requirements for independent audits of their internal controls to remain in the final version of the financial regulatory reform bill.
The House version of the bill included an amendment exempting public companies with market capitalizations of under $75 million from the audits, but the Senate version of the bill was passed before a similar amendment could be debated. The Securities and Exchange Commission has repeatedly delayed the requirement for small issuers to have outside audits of managements assessment of internal controls, but said last October that the requirement would take effect in nine months time.
Frank acknowledged at a speech during a Compliance Week conference that the provision was likely to be included in a final bill that will be produced by a House-Senate conference committee. I believe the votes are there whether I like it or not, he said, according to Dow Jones Newswires. Frank had introduced a proposal to strip the amendment from the House version of the bill, but it was voted down.
Frank also said he expected derivatives provisions in the Senate bill that would force banks to spin off their derivatives operations would probably be eliminated from the compromise bill. Frank said that the provision known as the Volcker Rule, named after former Federal Reserve Chairman Paul Volcker, that would ban proprietary trading by banks would probably be enough.
I dont see the need for a separate rule regarding derivatives because the restriction on banks engaging in proprietary activities would apply to derivatives as well as everything else, he said, according to The Wall Street Journal.
Sen. Blanche Lincoln, D-Ark., has said she would fight to retain the derivatives provisions, however. She has been named to the House-Senate conference committee, along with six other Democratic senators who voted for the bill and five Republicans who voted against it. Frank has recommended eight House Democrats and five Republicans for the conference committee.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access