Take a quick glance of our 2007 coverage of the issues facing smaller businesses lately.
At first, it seems as though regulators and lawmakers are finally giving the small-cap companies a break. After all, 2007 saw the creation of a new auditing standard that took scalability for smaller businesses into account for the audits of their internal-control assessments under the Sarbanes-Oxley Act, something that seemed unheard of when the law was passed in 2002. The year ended with even more good news: the Securities and Exchange Commission plans to vote on further delaying when smaller companies have to provide those auditor reports to the regulator.
On second thought, though, the year affirmed that smaller companies have to join their larger brethren in finally complying with the first part of Section 404, the initial internal-control report. That means they still have to put together their 404 management reports and tuck them into their next 10-K. Smaller businesses also saw the federal minimum wage go up $2.10, the first increase since the mid-1990s and a move that will surely hit their smaller coffers hardest.
Read on to see what other issues came across smaller-business CFOs’ desks this year, such as the tax breather provided by the FIN 48 delay, advice on how to woo angel investors, and improvements to capital-raising measures offered by the SEC. And keep in mind the next regulatory battle smaller companies will have to face: pushing off a possible mandate for moving to International Financial Reporting Standards.
• Painful Memories: SEC Grilled on 404 Costs
Congress’s new requests for “hard-dollar” figures on the costs of internal-controls compliance could scratch old scars at the commission.
• SEC Throws Small Companies a Bone
The commission expands the number of companies that can scale down its disclosure rules and exempts private companies from registering compensatory stock options.
• SEC: Guidance Yes, Extension No
Agency offers long-sought help with Section 404, but tells small companies they’d better file on time.
• What the 404 Delay Means for Small Companies
Their internal-control reports will not be audited the first year.
• Small Businesses Weigh In on Wage Hike
The chairman of the Senate Finance Committee insisted that the minimum-wage increase will be paired with tax cuts for small businesses.
• FIN 48 Delay Offers Small Cos. Breathing Room on Taxes
While private companies have longer to comply with FASB’s new rule on uncertain tax positions, that doesn’t change the balance-sheet consequences.
• How to Dance with Angels
Small businesses often prefer to slow dance with angels than boogie with venture capitalists. But knowing when to change partners is also important.
• Quick Quiz: What’s a Reporting Entity?
In the small-business arena, where people often own or control a number of small businesses, the answer can get complicated pretty quickly.
• Employers Hit for Misclassifying Workers
House members hear complaints about workers being misclassified as independent contractors, enabling some businesses to inappropriately scrimp on taxes.
• Finance Bigs Like Mandated Global Accounting Rules
Big multinationals favor a quick jump to International Financial Reporting Standards, while smaller domestics want to go slow.