Reducing the compliance requirements for delayed filers? 1280

  • I have been hearing rumors that the SEC is considering reducing or removing 404 compliance requirements for delayed filers. Is anyone closer to the grape vine than I am that might have some insight?

  • The SEC Advisory Committee on Small Public Companies is currently drafting final recommendations that will lessen the cost/impact/compliance for small companies.
    The committee is going to finalize the draft in February, and then the SEC will consider their recommendations in April. Jefferson Wells did a nice summary, which you can find at
    The loudest voices against compliance for small companies are focusing on high costs, without any benefits, and are driving the discussion.
    However, when the SEC extended the compliance deadline, there were many in the SEC and investor groups (and pension funds) that voiced concern.
    Hope this helps.

  • In addition to the insight and resources cited in the previous posting, it might be possible to ‘read between the lines’ through careful reading and analysis of a speech on 12/5/2005, by SEC Chairman: Remarks Before the 2005 AICPA National Conference on Current SEC and PCAOB Developments.
    The full text of the speech is found at:
    In short, the speech addresses 3 principal areas of change:

    • simplifying accounting rules;
    • creating more choice and competition for auditing services;
    • and making financial information interactive for the benefit of investors
      A diluted version of SOX for small companies might receive support from the PCAOB and the SEC and in particular, smaller companies.
      However, developing and implementing concrete changes could be a daunting proposition due to inherent risks, risk concentrations in a smaller company and the inability of the decision makers to develop a clear and consistent SOX compliance requirement for delayed filers.
      To date, the changes implemented due to high costs of SOX compliance incurred by the accelerated filers seems to have resulted in high level changes, and suggestions for improved efficiency–not a defined and measurable reduction in overall compliance requirements.

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