CONTACTS: Eric Wohlschlegel
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March 10, 2008    

       

Chamber Supports One-Year Delay of SOX 404(b) and Cost-Benefit Study
                                   
WASHINGTON, D.C.-The U.S. Chamber of Commerce today submitted comments to the Securities and Exchange Commission supporting the proposed one-year delay of the implementation date for Sarbanes Oxley Section 404(b) for small businesses and urging the Commission to act fast on implementing the proposal. 
 
"Small businesses have already begun incurring significant costs to prepare for full compliance with this provision," said Michael Ryan, senior vice president and executive director of the Chamber's Center for Capital Markets Competitiveness. "Failure to act quickly in implementing the proposal could significantly undermine the cost cutting objectives of the revised standards issued last May."

 

The Chamber also applauded the SEC's initiative to study over the next several months the costs of Section 404 under the new rules.  The implementation of Section 404 has led to costs and regulatory burdens far beyond what Congress intended and well in excess of the benefits to shareholders and management, according to the Chamber. "We're pleased to see this balanced approach being brought back into the oversight of our capital markets," said Ryan.
 
Last May, the SEC and PCAOB took steps to reduce the burden of Section 404 compliance, but the data necessary to assess the effectiveness of these steps will not be fully available until later this year. "Small businesses must scale their controls based on the nature and complexity of their operations and the experience of large filers is critical to understanding this process," said Ryan. "We remain concerned that the continued ambiguity small businesses face in complying with SOX 404 results in unnecessary costs."

 

Last November, the Chamber released its own report showing that, despite recent reforms, SOX Section 404 continues to disproportionately burden small businesses. The Chamber has  also testified before the House Small Business Committee on the same subject calling for action. The study can be viewed at: /publications/reports/0711soxsurvey.htm

 

The U.S. Chamber of Commerce is the world's largest business federation representing more than 3 million businesses and organizations of every size, sector, and region.

 

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