The Securities and Exchange Commission has approved new interpretive guidance on compliance with Section 404 of the Sarbanes-Oxley Act. Here is the SEC’s Press Release.
Section 404 is perhaps the most maligned provision of the Sarbanes-Oxley Act. Critics argue that the costs of 404 compliance are excessive and are disproportionately burdensome for smaller public companies. According this New York Times article the guidance provides a relaxed set of compliance guidelines for smaller companies (with a market capitalization of less than $75 million). The Public Company Accounting Oversight Board (PCAOB) is expected to adopt compatible auditing standards.