Sarbanes-Oxley Deja Vu

Last week, the U.S. House of Representatives proposed amendments to the Investor Protection Act of 2009 that will in essence seek to roll back some of the reforms implemented as a result of the Sarbanes-Oxley Act of 2002.  Specifically, Representatives Carolyn Maloney and Scott Garrett are seeking to exempt public companies with a market capitalization of less than $75 million from the requirement to have their internal controls audited by an external firm.

Their approach is to request the SEC to perform a study on the costs of compliance for these firms and then, determine the need for the requirement. While this may be a reasonable request, it has already been made and the SEC completed a similar study this year.  As a result, the SEC confirmed the need for the external audit and announced it will be required of all companies next year.  The Huffington Post reported that several investor advocate groups as well as a former SEC chairman were outraged by the proposed amendment.  Read more at: http://www.huffingtonpost.com/2009/10/27/house-democrats-john-adle_n_334876.html