Recent Survey Finds Over Two-thirds of Small Public Companies Would Have
Difficulty Meeting Final Phase-in of SEC Deadlines
83% of CFO's Agree On Extension of Section 404 Deadline for Small Companies
FLORHAM PARK, N.J., Sept. 19 /PRNewswire/ -- In a letter submitted to the
Securities and Exchange Commission ("SEC"), Financial Executives
International's ("FEI") Small Public Company Task Force ("SPCTF") urged the
SEC to delay the compliance date of Section 404 of the Sarbanes-Oxley Act an
additional year for non-accelerated filers. The letter comes in conjunction
with the SEC's Small Business Capital Formation Forum in San Francisco this
week, where FEI member Rick Brounstein will be in attendance.
"We call on the SEC to act as soon as possible in implementing the
recommendations of the SEC Advisory Committee," said Colleen Cunningham,
President and CEO of FEI. "Deferring the compliance date would provide these
small companies with much needed relief in the form of time and resources."
A survey released this month by Financial Executives Research Foundation
("FERF") found that over two-thirds of the small public company respondents
indicated they would have difficulty meeting the final phase-in of the SEC's
accelerated filing deadlines. The survey also determined the impact Section
404 is having on small public companies' business decisions. It found that,
for those accelerated filers that have had to file their Section 404 reports,
over three-quarters stated that installation and updates of IT systems
continue to be impacted by Section 404.
The survey can be found at:
http://www.fei.org/rfbookstore/PubDetail.cfm?item_id=230.
A separate survey of CFO's by FEI and Baruch College's Zicklin School of
Business, found that over 52% of CFO's surveyed agree with the SEC Advisory
Committee's recommendation that the SEC extend the Sarbanes-Oxley Section 404
compliance deadline for companies with less than $75 million public float, by
one full year. Additionally, 31% of CFO's surveyed think the deadline should
be extended further than one year.
SPCTF's principal comments in the letter include:
* The compliance date of Section 404 of the Sarbanes-Oxley Act should be
delayed an additional year for non-accelerated filers.
* The measurement date for determining whether a company falls under the
non-accelerated vs. accelerated filer category should be as of the
first day of a company's fiscal year with respect to that year's year-
end reporting requirements.
* The final phase-in of accelerated filing dates for Form 10-K and Form
10-Q should not be imposed on smaller companies.
* The measurement date for determining annually if a company meets the
definition of "smaller company" for reporting purposes should be
specified such that a company will know on the first day of its fiscal
year whether it falls under the definition of "smaller company" for
that fiscal year.
The full text of the letter is available at:
http://www.fei.org/files/spacer.cfm?file_id=1720.
About FEI
Financial Executives International (FEI) is the leading advocate for the
views of corporate financial management. Its 15,000 members hold policy-
making positions as chief financial officers, treasurers and controllers. FEI
enhances member professional development through peer networking, career
management services, conferences, teleconferences and publications. Members
participate in the activities of 85 chapters, 74 in the U.S., 11 in Canada.
Financial Executives Research Foundation (FERF) is the non-profit
501(c)(3) research affiliate of FEI. FERF researchers identify key financial
issues and develop impartial, timely research reports for FEI members and non-
members alike, in a variety of publication formats.
SOURCE Financial Executives International
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Related links:
http://www.fei.org/files/spacer.cfm?file_id=1720
Company News On-Call:
http://www.prnewswire.com/comp/310650.html
CONTACT:
Kristen Crofoot of Financial Dynamics,
+1-212-850-5692, kcrofoot@fd-us.com
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