Number: RS22482
Title: Section 404 of the Sarbanes-Oxley Act of 2002 (Management Assessment of Internal Controls): Current Regulation and Congressional Concerns
Authors: Michael V. Seitzinger, American Law Division 
Abstract: On December 15, 2006, the SEC adopted rule changes giving smaller firms more time to comply with Section 404's reporting requirements. In the 110th Congress, a number of bills have been introduced that would address the perceived issue in different ways. Among these bills are H.R. 1049, H.R. 1508, H.R. 1550, H.R. 1780, H.R. 2727, S. 869, and S. 1153. On April 4, 2007, the SEC's commissioners endorsed the recommendations of its staff for the staff to work closely with the Public Company Accounting Oversight Board to issue auditing standards that are intended to ease the burden on small companies in complying with Section 404. On May 23, 2007, the SEC voted to approve a somewhat relaxed set of guidelines for the internal accounting controls required by Section 404 for smaller public companies, defined in most cases as those with a public float below $75 million. SEC Chairman Cox has proposed that smaller companies be given an additional year to comply with the internal control audit requirements of section 404. The agency may vote on this proposal as early as January 2008.
Pages: 6
Date: December 27, 2007