Former Senator Paul Sarbanes, D-Md., who, as the head of the Senate Banking Committee, co-authored the sweeping Sarbanes-Oxley Act, said that he supports developing additional guidance for smaller filers but, not surprisingly, he dismisses exempting those companies from compliance with the law's rigid Section 404."Stop and think about that for a moment," Sarbanes said in a speech before attendees at a conference on contemporary accounting issues. "That would mean that you would be exempting 80 percent of public companies from compliance."

Sarbanes referred to recent pronouncements from the Securities and Exchange Commission and the Public Company Accounting Oversight Board regarding potential streamlining of the 404 internal controls provision, which small filers have complained is disproportionately costly to them in terms of money and manpower.

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