It was a smooth first meeting for Securities and Exchange Commission Chairman Christopher Cox, with the panel voting unanimously to extend the deadline for when small companies will have to have their internal controls documented under Section 404 of the Sarbanes-Oxley law.
Speaking about their commitment to investors, Cox and the four members of the panel said before their vote that the deadline extension was meant in no way to diminish their support for SOX. An SEC advisory group hard requested the second delay in the control rules. As expected, public companies with a market capitalization of less than $75 million will now have until July 2007 to review their financial controls.
The panel also voted 5-0 to update guidance on the use of soft dollars -- a way for mutual funds to get outside brokerage and research services without having to pay for them directly by sending buy and sell orders for securities to the brokers. Outside brokers often rebate money or credits to advisors, a practice that members of the panel said can be abused. The SEC will seek public comment on the issue.
The panel also moved to tighten deadlines for the largest public companies to release their year-end financial reports. Businesses with public market capitalization of more than $700 million must file annual reports within 60 days of their fiscal year-end, down from 75 days. Public comment is now being accepted, and a final vote will have to be taken in order to put the change into effect.
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