VideoStephen Taub, CFO.com | US
April 4, 2006
- The benefits of a strong control environment
Small companies would do well to take a hard look at their control environment and take effective steps to make improvements.
They should realize that this would only make them fundamentally stronger and better equipped to face business complexities while increasing shareholder value.
Waiver of the SOX provisions for small companies is not the solution. Rather, a more pragmatic, consensual approach is called for with smaller companies encouraged to develop a control environment that is just right for them in a focused, cost-effective manner.
After all, the cost of the controls cannot and should not be more than the possible benefits therefrom.Posted by Chandrasekar Venkataraman | Apr 5, 2006 7:41 AM ET
- Take the Public's Money and You'll Have to Pay a Price
It seems that the SEC Chairman and others are pushing back on relaxing/neutering the 404 provisions as they appy to smaller companies. Why is this given all the pressure to eliminate 404 for smaller companies because it is costly and onerous?
Perhaps it is because they are worried about creating a small cap compliance ghetto where the perceived risk (and cost of capital) is increased relative to today's market.
Maybe they want the U.S. markets to continue to maintain the highest standards relative to foreign markets, and avoid the "race for the bottom" with respect to investment standards that is occuring on other markets.
Or, perhaps it is because they know that smaller companies have significant existing challenges with respect to improving internal controls over financial reporting and there is no point in delaying the need to improve financial "hygiene" for this segment of issuers.
If you take the public's money you are going to have to pay the price.Posted by Charley Best | Apr 4, 2006 2:26 PM ET
