Christopher Cox, chairman of the Securities and Exchange Commission, said Monday that small companies should not necessarily expect an exemption from the internal-controls provisions of Sarbanes-Oxley, according to Bloomberg.
Speaking to reporters in Washington, D.C. following his presentation to a Stanford Law School forum on corporate governance, Cox said, “Our emphasis is on making 404 work and implementing it in a cost-effective and investor-protected way, rather than simply waiving it.”
His comments anticipate an April 12 public conference call, scheduled by the SEC Advisory Committee on Smaller Public Companies, to discuss the exposure draft of the committee’s report that had been released for public comment.
The advisory committee had voted 18 to 1 that most companies with a market capitalization below $700 million be excused from assessing their internal controls over financial reporting and from having their auditors certify those controls. The committee also recommended that most companies with a market cap below $100 million be exempted from Sarbanes-Oxley entirely; the current threshold is $75 million.
Most business lobbying groups have been looking to dilute the rules, if not scrap them entirely. On the other hand, Bloomberg pointed out that Cox’s comments echo the words of three former SEC chairmen — William Donaldson, Arthur Levitt, and Richard Breeden — who recently spoke out against a blanket exemption for small companies.