NEW 404 GUIDANCE, PCAOB AUDIT STANDARD
WASHINGTON, D.C. - In late May the Securities and Exchange Commission unanimously approved guidance aimed at helping public companies balance their internal control over financial reporting while reducing unnecessary costs, particularly for smaller companies. A day later, the Public Company Accounting Oversight Board approved Auditing Standard No. 5, to replace a previous standard on auditing internal controls.
"Companies of all sizes will be able to scale and tailor their evaluation procedures according to the facts and circumstances," said SEC Chairman Christopher Cox in a statement.
The new SEC guidelines largely resemble those originally proposed by the commission late last year. SEC chief accountant Conrad Hewitt said that the guidance should allow companies to focus on risk and materiality. The changes are especially applicable to smaller public companies, which will begin complying with Section 404 on Dec. 15 for the 2007 calendar year.
The SEC also approved a few other technical amendments and voted to revise the requirements regarding the auditor's attestation report on the effectiveness of internal control over financial reporting.
The PCAOB's new principles-based standard was designed to coordinate with the SEC guidance, and is meant to increase the likelihood that material weaknesses in internal control will be found before they result in material misstatement, while at the same time eliminating procedures that are unnecessary.
SMART GETS $60M IN PRIVATE EQUITY
DEVON, PA. - Smart Business Advisory and Consulting LLC announced that Great Hill Partners, a Boston-based private equity firm, has invested $60 million into its business.
James Smart, chief executive and founder of the accounting firm, said that the new capital will help strengthen Smart's position in the changing accounting and consulting market. "This new market situation has created a significant growth opportunity for us over the past few years," he said.
Great Hill manages over $1.5 billion in capital, and focuses on investing in growth companies operating in the business and consumer services, media, transaction-processing, and software industries.
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