Will Sarbanes-Oxley Now Apply to Small Businesses?
| by Chris Anderson | ||||
Is President Obama’s plan to increase regulation on the markets? His new chairman of the Securities and Exchange Commission, Mary Schapiro, indicated its time for small public companies to comply with the Sarbanes-Oxley Act.
The original intent of the Sarbanes-Oxley legislation was for all public companies to comply with the requirements for internal controls over financial reporting. Companies with less than $75 million in market value were supposed to comply.
Under the Bush administration, the former SEC chairman Christopher Cox had granted a series of one-year exemptions for small business. Many small businesses complained that it would be too costly for them to comply.
The new SEC chairman said internal controls guarantee “accurate, robust and easy-to-understand financial reporting,” and that “It’s time that we bring uniformity to the system so that investors know what to expect from companies.”
If there is one thing we know about regulations, they always increase and rarely ever decrease. One just has to accept the fact that regulations are ever increasing.
Categories:
Accounting Procedures
Tags:
act • compliance • financial reporting • internal controls • Obama • oxley • regualtions • sarbanes • Sarbanes-Oxley • small business • SOX
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Originally published in 2009 by Bizmanualz, Inc. under the title Will Sarbanes-Oxley Now Apply to Small Businesses?. All rights reserved. Reproduction permitted with attribution only. www.bizmanualz.com
2 Responses to “Will Sarbanes-Oxley Now Apply to Small Businesses?”
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March 12th, 2009 at 4:21 pm
This is a reality, not some TV show, why arent we using it?
March 13th, 2009 at 12:34 pm
Sarbanes-Oxley only applies directly to public companies. However, it does state that these public companies cannot abdicate their authority over outsourced processes. I suspect that more and more, public companies are going to request – then demand – that their subcontractors, outsourcers, etc., demonstrate their ability to comply with SOX. Private companies that take the initiative to comply now increase their odds of surviving – and thriving.