Noted professional and college football coach Lou Saban was at the helm of the Denver Broncos who, on opening day in 1971, were unexpectedly giving the then-powerhouse Miami Dolphins the fight of their lives.

Late in the game with the score knotted at 10, Saban eschewed going for the win and instead ran out the clock and settled for a tie.

When queried by the press as to why a less-than-mediocre team wouldn’t take the gamble for victory against one of the best clubs in football, Saban simply shrugged and said, “Half a loaf is better than none.”

At the next home game, Saban was warmly greeted by fans who bombarded him with hundreds of half loaves of bread.

I’m wondering if small filers are feeling a bit like those Denver fans after last week’s pronouncements by the Securities and Exchange Commission on its much-anticipated proposals on Sarbanes-Oxley.

Smaller companies, many of whom eagerly anticipated partial or full exemptions from Section 404 of the sweeping corporate reform law, were instead, given auditing guidance designed to “evaluate the design of only those financial controls that might carry the risk of having a material impact on financial statements.”

SEC officials assured those smaller companies, which have long lobbied against the disproportionate costs they bear in time and capital for 404 compliance in relation to mammoth entities such as GE or General Motors, that the new guidance would be far less burdensome than the original 404 mandate issued in 2002.

SEC Chairman Christopher Cox said the new approach enables smaller filers to “to scale and tailor their evaluation methods and procedures to fit their own facts and circumstances.”

The idea behind the proposal was to give auditors a toolkit that hopefully would allow them to bypass what they have long viewed as unnecessary and expensive audits of their financial controls, ones that would at least in theory have a minimum impact on their respective financials.

However, some filers no doubt feel they’ve been given the proverbial half a loaf or worse.

Many of the major financial associations lauded the move as a positive step, while, not surprisingly, the Competitive Enterprise Institute, which views SOX and the PCAOB in the same light as a notice for jury duty, labeled the proposals largely cosmetic in nature and added that the SEC missed an opportunity for meaningful reform (read: SOX rollback).

Whatever.

It may be some time before regulators approach the issue of SOX reform, so for better or worse, smaller filers will soon discover if half a loaf is better than half a restatement.

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