Panel advises exempting smaller firms from internal rule
The reach of the antifraud Sarbanes-Oxley Act should be scaled back and the smallest public companies should be exempt from one of the most burdensome parts of the law, a Securities and Exchange Commission advisory committee told the agency this week.
Microcap companies with a market capitalization of less than about $100 million to $125 million and annual revenue below $125 million should be exempt from Sarbanes-Oxley 404, according to the preliminary recommendations of the SEC Subcommittee on Internal Controls.
Small companies with a market cap of less than $750 million and sales below $250 million should be exempt from the external audit requirement of Sarbanes-Oxley 404, the committee added in a report that was posted on the agency's Web site Thursday.
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