RegulationCorporate GovernanceSEC offers further 404 relief

SEC offers further 404 relief

Watchdog announces further delays but benefits are questioned

The US Securities and Exchange Commission has announced further relief for
smaller companies and many foreign filers from complying with Section 404
requirements on internal controls.

Small companies now have until 15 December 2007 to fulfill the requirements
while foreign companies will not have to have auditor sign-off on the controls
until July next year.

Newly listed companies will now not have to comply until their second year of
accounts.

However the changes will benefit very few UK companies, according to Jon
Rowden, director at PricewaterhouseCoopers. He argued that many small companies
that have a 31 December year end will not benefit from the deadline slippage,
while the removal of auditor sign-off for foreign companies will not reduce the
administrative burden at all, although it may help keep down auditor costs for a
little longer.

The relief is aimed at helping companies while the SEC redesigns Section 404
so that it can be implemented ‘in a way that is efficient and cost effective for
investors’.

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