Work on revising 2002's post-Enron Sarbanes-Oxley (SOX) corporate audit reforms is hung up on the question of how small companies should be treated, with U.S. regulators expected to meet on the issue on Sunday.
The chairmen of the Securities and Exchange Commission and the Public Company Accounting Oversight Board are expected to meet to discuss how SOX Section 404 should apply to companies with $75 million to $700 million in market capitalization.
The small companies problem has bedeviled regulators for months amid sharp criticism from business that Section 404 -- as applied by audit firms -- is too costly and time-consuming. It deals with corporations' internal financial controls.
Regulators are trying to fine-tune the section to keep audit firms from applying it too aggressively, while lawmak ers in Congress watch carefully in case legislation may be needed.
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