Sept. 22, 2005--Small businesses have an extra year to meet strict anti-fraud regulations of the Sarbanes-Oxley Act following a unanimous vote by the Securities and Exchange Commission Tuesday.
The SEC's small business advisory committee voted 5-0 to give smaller companies until July 2007 to file reports on internal financial controls, a main requirement of the 2002 law created in the wake of Enron Corp., WorldCom Inc. and other large-scale corporate scandals.
The one-year reprieve is the second granted by the SEC to small businesses, which it defines as those having a market value no greater than $75 million.
In March the advisory committee extended the compliance deadline a year after business owners complained about the added labor and costs of meeting the new requirements.
The advisory committee was created last December to better gauge the impact of the act on small businesses. It held public meetings in San Francisco earlier this week to hear from owners and small business groups. It was the first meeting overseen by SEC Chairman Christopher Cox, the former Republican congressman from California who replaced William Donaldson after his unexpected resignation earlier this year.
In a letter last month, the committee told Cox the costs of compliance were "disproportionately larger for smaller companies."
Cox said before Tuesday's vote that the new deadline "in no way" reflected a move to back away from the act's strict anti-fraud regulations.