SEC Sets Date for SOX Compliance

By Lisa Valentine

Early this month, the Securities and Exchange Commission announced that it had finally and definitively set a date for smaller public companies to comply with Section 404 of Sarbanes-Oxley (SOX), which sets the rules for reporting of internal controls.

SOX was enacted in 2002 but did not cover companies with a public float below $75 million in order to give these smaller firms extra time to gear up their governance efforts and figure out a way to pay for the added expense. The SEC has extended the compliance date for smaller firms several times over the past 7 years. It’s no surprise that the SEC has finally set an end-date for these smaller firms and the delay has certainly worked in favor of small firms as they learn from larger firms the most efficient ways to carry out this corporate governance.

The time extension for smaller firms expires beginning with annual reports of companies with fiscal years ending on or after June 15, 2010.

SEC Chairman Mary Schapiro closed the door on any further stays of execution, saying, “Since there will be no further Commission extensions, it is important for all public companies and their auditors to act with deliberate speed to move toward full Section 404 compliance.”