The Securities and Exchange Commission should not succumb to political pressure and allow smaller public companies to be exempt from 404 requirements of the Sarbanes-Oxley Act, said Arthur Levitt, former chairman of the SEC.
"I fear that these proposed changes will harm, not help, small companies," said Levitt in his January 27 commentary for The Wall Street Journal. "Instead of searching for exemptions to the rule, we need to step back and help small businesses improve financial controls, attract capital, and strengthen the very markets critical to their ability to flourish."
The SEC advisory committee on smaller public companies recently recommended that public companies with a market cap of less than $100 million and revenue of no more than $125 million would be exempt completely from 404 requirements. Those with a market cap of less than $700 million and revenues of no more than $250 million would not have to hire an independent, outside auditor to test their internal controls.
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