Even as a kid, I never truly got into the clichéd “Spirit of Christmas.”
Christmas to me meant stringing cheesy-colored lights in cold weather, absorbing numerous pricks from the pine needles on our tree, enduring overlong visits from relatives I had little or no desire to see, eating too much of my mother’s suspect cooking and later on, as I entered my wage-earning years, shelling out not an insignificant amount for gifts.
Even now, my family knows better than to ask for help decorating the tree or wrapping gifts that I’ll be paying for until Labor Day.
Two words you’ll seldom hear me utter are “holiday cheer.” Except of course when I’m about to drain a goblet the size of an astronaut’s helmet filled with Russian River Pinot Noir.
Small public filers however should have no such problem getting into the holiday spirit.
Their version of St. Nick, a.k.a. Securities and Exchange Commission chairman Christopher Cox, has given them a reason for optimism heading into 2008, proposing that small public companies be given yet another one-year delay to get compliant with Sarbanes-Oxley 404.
Cox indicated that the delay would help the commission to complete a study of the compliance costs of the SOX provision, which according to the commission would be ready sometime in mid-2008.
Smaller companies have long bemoaned that proportionally, the costs of 404 compliance are far higher than their Fortune 500 counterparts and have since been given more delays than a flight from LaGuardia to O’Hare.
Cox even hinted that the 404 requirements for small businesses might be waived entirely but that would be up to Congress.
Feedback on Cox’s proposal has been somewhat mixed.
Not surprisingly, lawmakers from the Small Business Committee in the House and Senate lauded the decision, while the Institute of Management Accountants hailed the proposal — but with reservations.
The IMA pointed out that there are still no systematic changes to create a practical implementation framework of SOX 404 for small businesses, and also pointed out that the one-year delay in reality creates a two-year time gap in which management would be responsible for its opinion on internal controls, thereby creating the potential for legal liability.
Global audit firm Grant Thornton disagreed with the chairman’s proposal, claiming that only a handful of smaller filers have taken advantage of prior 404 deferrals to properly prepare, impairing the SEC's ability to gather accurate cost statistics for smaller firms for the report.
It seems both sides put forth valid points, but to put things in perspective it’s been more than FIVE years since SOX was signed into law. You can only delay something for so long before a final decision has to be made.
Following the release of the SEC report, the chairman will have to render a yay or nay on 404 compliance for small companies.
But until that time I’ll break from my usual dour mood, which begins immediately after Thanksgiving and traditionally lasts through the third quarter of the Rose Bowl, and wish happy holidays to all — regardless of filing size.
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