The Securities and Exchange Commission (SEC) has proposed a one-year extension for small companies to comply with the Sarbanes-Oxley act while SEC professional staff start a cost-benefit study of an upcoming auditor attestation requirement for smaller companies under Section 404(b) of the act.

SEC said the study would collect and analyse extensive ‘real world’ cost and benefit data from a broad range of companies currently complying with section 404 under the newly-issued guidance for companies and auditors.

The new guidance for management and the new auditing standard were intended to reduce the compliance costs of Section 404 while strengthening its focus on material controls.

In addition to assessing the Section 404 cost reductions resulting from the commission's recent actions, the final report will also inform any decision to improve the efficiency and effectiveness of section 404 implementation.

Further reading:

Sarbanes Oxley compliance becoming easier

The concept of corporate risk