The Securities and Exchange Commission stopped well short of proposing exemptions from the Sarbanes-Oxley Act’s internal control provisions that many small companies had loudly lobbied for at the panel’s Wednesday meeting.Under the guidance proposed by the SEC, executives would evaluate the design of only those financial controls that might carry the risk of having a material impact on financial statements.

"With this guidance, management will be able to scale and tailor their evaluation procedures to fit their facts and circumstances and investors will benefit from reduced compliance costs,” said SEC Chairman Christopher Cox. “While the guidance is intended to help public companies of all sizes, smaller companies should particularly benefit from its scalability and flexibility."

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