NYSE Euronext CEO Duncan Niederauer thinks accounting firms are charging small companies too much to comply with Sarbanes-Oxley requirements and suggested the SEC may pressure the firms to reduce their fees.
In an interview with The Wall Street Journal, Niederauer blamed accounting firms and Sarbanes-Oxley compliance for making it too expensive for many small private companies to go public on stock exchanges such as the NYSE. He doubts the SEC will relax the Sarbanes-Oxley requirements, but he thinks the SEC can help convince the accounting firms to lower their prices.
What we raised with the SEC is, were not asking you to change the legislation, Niederauer told the Journal. Were just asking you to make sure its applied in a way that compliance for small companies is far less costly than its proven to be. The accounting firms end up charging a lot more to small companies to remain compliant than regulators in Washington probably think is the case.
The NYSE Euronext chief is more hopeful about convincing the accounting firms to alter their fee structures than trying to get Congress to soften Sarbanes-Oxley rules.
I think its time for accounting firms to step up and be a part of the solution by saying [that] their contribution will be not charging a small company a million bucks but charge a couple hundred thousand, which is all the SEC thinks is required to comply, he said.
The NYSE did not respond to a request for clarification.
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