Dec. 13, 2005--Small public companies could save millions of dollars now spent on audits required by the Sarbanes-Oxley Act, according to a plan that the Securities and Exchange Commission will consider on Wednesday.

Last week, a panel created by the SEC proposed that small public companies should not be forced to pay outside auditors to review internal controls, a requirement under Sarbanes-Oxley Rule 404. Instead, companies that have less than $750 million in market capitalization and $250 million in revenue should be allowed to review their own internal controls, the panel said.

The panel also recommended that the commission remove all of the act's regulations on auditing internal controls for smaller public companies that have market capitalizations between $100 and $125 million and revenue less than $125 million.

The panel offered its recommendations to the SEC Advisory Committee on Smaller Public Companies. That committee will meet this week to look at the recommendations. The five SEC commissioners, who must approve any proposal before it becomes who law, have said that they will give strong weight to the committee's recommendations. The commissioners plan to vote on those recommendations in April.

The Sarbanes-Oxley Act was passed in 2002 in the wake of financial scandals at Enron, WorldCom, and Tyco. The act seeks to improve the accuracy and ensure the disclosure of public companies' financial statements. It also established a public company accounting oversight board and added restrictions on the relationships between companies and auditors.

Business groups have argued that the Sarbanes-Oxley requirements are too costly and time consuming for companies, especially smaller ones with fewer resources.

The act has forced many small companies to spend millions on compliance -- even though the law was intended to regulate big, public ones.

Many fast-growing private companies currently exempt from Sarbanes-Oxley's rules are already complying with them, preparing for a time when they grow into a large company that must comply, a survey released by PriceWaterhouseCoopers survey revealed in June. Three in 10 small private firms said that Sarbanes-Oxley has impacted them, while 59 percent said that they've already adopted some of the law's rules, the survey said.