The Securities and Exchange Commission unanimously approved guidance yesterday aimed at helping public companies balance their internal control over financial reporting, while at the same time reducing unnecessary costs, particularly for smaller companies.
“Congress never intended that the 404 process [outlined by the Sarbanes-Oxley Act] should become inflexible, burdensome and wasteful,” said SEC Chairman Christopher Cox in a statement. “[With this new guidance] for management on the evaluation and assessment of its internal controls over financial reporting, companies of all sizes will be able to scale and tailor their evaluation procedures according to the facts and circumstances. And investors will benefit from reduced compliance costs.”
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