The Securities and Exchange Commission announced it will hold an open meeting on April 4, to discuss the Public Company Accounting Oversight Board’s proposed auditing standard for Section 404 of the Sarbanes-Oxley Act and the coordination of the proposed changes with the SEC’s own guidance concerning implementation.
Both proposals were published for public comment in December 2006, with the comment period ending for both on Feb. 26.
In May 2006, the SEC and the PCAOB pledged to make compliance with Sarbanes-Oxley’s internal control provisions more efficient and cost effective for public companies of all sizes.
As part of this process, the SEC’s proposed management guidance is designed to focus attention on those internal controls that present the greatest risk for a material financial misstatement. At the same time, as a companion to the proposed SEC guidance, the PCAOB proposed a thoroughgoing revision of its existing standard for Section 404 audits.
The comment letters received by the SEC and the PCAOB have highlighted the importance of alignment between both group’s proposals. At the meeting the Commission’s staff will describe the remaining issues in aligning the proposed approaches, and the SEC will then consider those issues.
In a statement, SEC Chairman Christopher Cox said that the meeting should keep the regulators on track to consider final adoption of management guidance in May.
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