An advisory panel to the Securities and Exchange Commission may officially asked the agency to exempt businesses with less than $125 million in revenues from the internal control provisions laid out in the Sarbanes-Oxley Act.
The recommendation will be soon be put to a vote before the entire Advisory Committee on Smaller Public Companies.
In the panel's recommendations, the advisory group said that companies with market capitalization of $125 million and revenues under $125 million should be exempt from the rules altogether. And the group said that companies with market capitalization of less than $750 million and revenues less than $250 million should not have to employ independent auditors to attest to the strength of their financial controls.
In recent weeks, Republican SEC members Cynthia A. Glassman and Paul S. Atkins have expressed concern in public speeches that audit firms may be going too far in enforcing the regulations. SEC Chairman Christopher Cox, a summer appointee of President Bush, has not announced his position on the issue. A majority of the five-member commission would have to approve a relaxing of the control reviews for small companies.
The internal control provisions are scheduled to take effect for small companies in July 2006.
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