The Public Company Accounting Oversight Board will meet on Dec. 19 to consider exactly what changes to Sarbanes-Oxley’s internal control measures it will issue for public comment.
The Securities and Exchange Commission will offer its own take next week on what changes it would support -- as recently as last week, reports were floated that SEC Chairman Christopher Cox supported a proposal for auditors to test the controls of small public companies on a less-than-annual, limited basis. But following the recent release of a report from the Committee on Capital Markets Regulation, which urged that small companies be subject to regular testing of their controls, that may no longer be the case.
Published reports say that the latest draft changes call for auditors to take into account both the size of a company and the complexity of its business and accounting practices.
"While the [internal control] requirements provide great benefits to companies and their investors, we are concerned that the costs are not adequately aligned with the benefits,” said PCAOB Chairman Mark Olson, in a statement.
Olson also said that the changes will be consistent with the plan announced by the board in May, which include:
- Focusing the internal control audit on the most important matters;
- Eliminating unnecessary procedures;
- Incorporating guidance on efficiency;
- Providing explicit guidance on scaling the audit to fit the size and complexity of the company; and,
- Producing a simplified standard.
The meeting is open to the public and will be Web cast at www.pcaobus.org.
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