SEC Chairman Christopher Cox says small public companies should start getting ready to comply with the stricter auditing rules of Section 404 of the Sarbanes-Oxley Act, but left open the possibility of another deferral of the requirement.
"It is still in the cards for us, I think, to consider whether or not there is another deferral possible," he told an audience at the National Press Club, according to Bloomberg News. "It's not our plan. We want to make sure that everyone understands they need to get ready for this."
The rules mandating the internal control audits are currently scheduled to take effect for small public companies in 2009, but many companies have complained about the high cost of Sarbanes-Oxley compliance. Cox contends that the law gives investors greater confidence in the financial information they get from companies and helps the SEC to enforce laws against stock options backdating.
However, he may allow small companies to simply begin assessing their internal controls but postpone the requirement for auditor certification for now.
