The Securities and Exchange Commission has established an advisory committee to gauge the impact of the Sarbanes-Oxley Act and other aspects of the federal securities laws on the nation's smaller public companies.
The SEC Advisory Committee on Smaller Public Companies will be charged with examining the impact of Sarbanes-Oxley in the following areas: the frameworks for internal control over financial reporting that apply to smaller public companies; methods for management's assessment of internal control; standards for auditing internal control; corporate disclosure and reporting requirements and federal corporate governance requirements; accounting standards and financial reporting requirements; and the process, requirements and exemptions related to securities offerings.
Herbert S. Wander, a Chicago attorney and partner in the law firm Katten Muchin Zavis Rosenman, and James C. Thyen, president and chief executive of Kimball International Inc., a manufacturer of furnishings and electronics based in Jasper, Ind., have been named as co-chairs of the committee. An additional nine to 19 members are expected to be named to the group.
SEC Chairman William Donaldson noted that, "The time is ripe to review how the act, including areas like internal control reporting, and other aspects of the SEC's regulations affect smaller companies."
"Small companies do not fit into a 'one-size-fits-all' category. That is why, as we move forward to implement the Sarbanes-Oxley provisions, we must keep in mind that smaller companies bare a disproportionate amount of the regulatory burden," Republican Senator Mike Enzi, one of the architects of Sarbanes-Oxley, said of the committee's formation.
The committee will begin operations shortly after the additional members are named and the SEC staff files the committee's charter with Congress.
