Small companies to get Sarbox exemption

Thousands of small companies in the US could be made exempt from auditing
rules brought in under the tough Sarbanes-Oxley legislation, introduced only
four years ago.

An influential advisory panel appointed by the US Securities and Exchange
Commission is set to make the proposal as part of a multi-front assault on the
Sarbanes-Oxley Act of 2002, the International Herald Tribune reported.

The Sarbox rules came into force following the scandals at Enron and WorldCom
with the aim of toughening up auditing and corporate governance rules to prevent
similar accounting disasters in the future.

The panel proposal would see 80% of public companies exempted from the
provision that requires companies to review their financial reporting procedures
and fix any problems that could lead to mistakes or fraud.

The committee proposes a full exemption for companies with a market
capitalisation of less than $128m (£72m) and a limited exemption to those with
capitalisations of between $128m (£72m) and $787m (£440m).

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