An early Christmas present to all “Smaller Companies and Newly Public Companies” from the SEC was announced on December 15, 2006 (Press release 2006-210). This further extends the deadline for management and auditor reports for all companies that are considered small or newly public. This additional extension does not provide any grants or reductions in the requirements, but is solely for the purpose of extending the time necessary to comply.
This is especially important as recent publications have made the requirements for SOX 404 compliance more relevant and reflective of the needs for organizations of many sizes. At this time, the updates to the guidance for implementation, the modifications to AS2, and the subsequent efficiencies gained by audit firms from conducting these internal audit engagements is creating a significant cost savings for smaller businesses, as larger organizations work out the kinks in the process.
These efficiencies are attested to in numerous letters to the SEC and PCAOB during the “Second-year Experiences with Implementation of Sarbanes-Oxley Internal Control Reporting and Auditing Provisions” period. As stated so eloquently by the Edward Nusbaum, CEO of Grant Thornton on the reasons for costs coming down in year two include “…experience…efficiencies in understanding…firsthand experience for planning and execution…” All of which can be associated with likely savings for the upcoming attestations for smaller businesses and newly filed companies. His six main points are posted below to communicate his entire meaning, as the above statements were greatly taken out of context for the purpose of this article:
The specific guidance table was exerted from the SEC press release, and describes precisely who and when are to comply with SOX:
Please post additional links that provide helpful information for smaller businesses and newly filed companies.
James DeLuccia IV