FLORHAM PARK, N.J., Dec. 7 /PRNewswire/ -- Financial Executives
International's (FEI) Small Public Company Task Force today expressed concern
that regulatory requirements of the Sarbanes-Oxley Act are hurting the
competitiveness of smaller public companies and called for more practical
solutions for such companies while still protecting investors. The statement
comes in advance of a December 14th public meeting of the Security and
Exchange Commission's (SEC) Advisory Committee on Smaller Public Companies, at
which time the SEC is scheduled to consider possible changes to current rules
for smaller companies.
"The U.S. economy depends on smaller companies, particularly for
innovation and new job creation," said Richard Brounstein, chairman of the FEI
Small Public Company Task Force. "But as currently designed, the
implementation of Section 404 of Sarbanes-Oxley drains the limited resources
of small companies particularly hard. The efforts and recommendations of the
SEC's Advisory Committee to develop a better approach represent a worthwhile
and important investment in the future of smaller public companies to ensure
they are not unduly disadvantaged." According to the SEC Office of Economic
Analysis, companies with less than $700 million in market capitalization make
up about 80% of all public companies, but only 6% of total stock market value.
According to FEI survey data collected from public companies in March,
companies with annual sales between $25 million and $99 million have seen
their audit fees jump 71% from Section 404-related work. Those with revenue
between $100 million and $499 million saw audit fees rise 66%, compared with
an average increase of 47% for the largest public companies surveyed.
"The regulatory requirements of 404 have taken a 'one size fits all'
approach and amount to a barrier to the growth of smaller companies,"
continued Brounstein. "It would be detrimental not to pursue an effective
alternative that preserves the intent and spirit of Sarbanes-Oxley while being
more sensitive to smaller companies. We look forward to the Advisory Committee
recommendations."
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.
Media Contact:
Kristen Crofoot
Financial Dynamics
212-850-5692
kcrofoot@fd-us.com
SOURCE Financial Executives International
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Related links:
http://www.fei.org
CONTACT:
Kristen Crofoot of Financial Dynamics,
+1-212-850-5692, kcrofoot@fd-us.com
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