Strict regulations governing corporate accounting and internal controls passed as part of the Sarbanes-Oxley Act of 2002 are placing an unintended burden on small business, which the Securities and Exchange Commission is planning to address, Dow Jones News reported.
Testifying before a House financial services subcommittee, Alan Beller, director of the SEC's corporation finance division, told lawmakers last week that the SEC is considering a way to "recalibrate" rules for smaller businesses, which were not exempted from the Sarbanes-Oxley Act.
Beller told lawmakers that improving corporate governance, accounting and financial controls "is important for all companies, regardless of size," Dow Jones reported.
In an effort to be sensitive to the different dynamics of small business, the SEC has taken steps to help them comply with the myriad of new rules and regulations. For instance, small businesses have until July 2005 to produce an annual assessment of internal controls-a full year more than larger companies.
Beller testified that the SEC has asked the Committee of Sponsoring Organizations, a private-sector body representing accountants, auditors, financial executives and investment professionals, to consider providing an alternative method for small businesses to evaluate their internal controls since "the right kinds of controls could be different" for them, Dow Jones reported.