Here’s some bad news for public companies: The Securities and Exchange Commission (SEC) announced that it won’t exempt smaller public companies from the anti-fraud provisions of the Sarbanes-Oxley Act (SOX).
The agency said all public companies must continue filing SOX reports detailing internal financial controls.
Smaller firms held out hope that they wouldn’t have to comply with the cumbersome and expensive law after a SEC advisory committee recommended such an exemption. No go, said the SEC, although the agency plans to streamline some SOX compliance procedures.
Outlook: All is not lost. Several members of Congress are pushing legislation to exempt companies with a market value of less than $700 million.