After more than a year, the Securities and Exchange Commission finally received a final report from its Advisory Committee on Smaller Public Companies.

There weren't any surprises left in the 240-page document -- its major recommendations, to exempt an estimated 80 percent of public companies from at least part of the internal controls provisions of the Sarbanes-Oxley Act, and exempt and companies with market values less than $125 million, was first announced in December.

And just as it was certainly no secret that members of the advisory panel largely sided with, and come from the perspective of, smaller public companies, in the past four months the hubbub has largely centered on whether the five-person SEC will do anything at all with the panel's recommendations.

Loosening the key controls that form the essence of SOX for so many companies, never mind suggesting outright exemptions, probably isn't exactly what the SEC had in mind when the advisory panel was assembled in early 2005. To the panel's credit, or folly, depending on your perspective, the suggestions for changes to Sarbanes-Oxley do tip to an extreme. But how to reconcile that perspective with a law that has been in effect for more than three years, and one that even the smallest public companies should now be close to operating under?

The Big Four released a report earlier this month detailing the tremendous drop-off in the cost of the law in Year Two of implementation, and seemingly anyone and everyone associated with the passage of SOX has spoken out in defense of keeping the law as is.

I n accepting the final report, SEC Chairman Christopher Cox thanked the advisory committee's for performing a public service, noting that the report makes 32 recommendations in reflecting the feelings of smaller companies -- insights gained from more than a dozen public meetings across the country, testimony from 42 expert witnesses and many hours of deliberation over the past 13 months.

"The commission will carefully consider these and other recommendations as we go forward," Cox said in a statement. "For now, as we receive this report, the Commission can say with honest appreciation: Thank you for a job well done."

Perhaps it wasn't the solid embrace of the report the advisory panel might have dreamed of, but less than a month into the job, Cox voted with the SEC in September to delay a deadline for public companies with a market capitalization of less than $75 million -- they now have until July 2007 to review their financial controls.

That was a smart compromise, but meeting the advisory panel enough halfway to the extreme it has outlined promises to be a much tougher task.

The massive final report is available in its entirety at www.sec.gov/info/smallbus/acspc/acspc-finalreport.pdf.

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