The Securities and Exchange Commission is expected to give small companies another year to comply with a Sarbanes-Oxley rule intended to improve controls over financial reporting, The Wall Street Journal reported Tuesday citing people familiar with the matter.
The SEC, which in March agreed to a one-year delay for small businesses, plans to grant another yearlong reprieve later this month. The relief would give companies with market capitalization of up to $75 million until July 2007 to comply with the rule.
The internal-controls rule, required under the 2002 Sarbanes-Oxley law, requires that companies assess the controls they have in place to prevent accounting mistakes and fraud and have their external auditor attest to those controls. The assessment must be included in the company's annual report, along with a description of any "material weaknesses" found.
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