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This might help our little public companies:

Republicans plan bill relaxing Sarbanes-Oxley law
Mon May 15, 2006 4:39 PM ET

By John Poirier

WASHINGTON, May 15 (Reuters) - A group of U.S. Republican lawmakers said on Monday they will introduce legislation this week to modify the landmark Sarbanes-Oxley corporate reform law and exempt small companies from some requirements that have been criticized as too costly.

At issue is a provision, known as Section 404, which requires companies to disclose more about their internal financial controls and outside auditors' opinions on the adequacy of the controls. The Sarbanes-Oxley law was passed by Congress in 2002 to help restore investor confidence after Enron Corp.'s accounting scandal and collapse.

The planned House bill would allow companies with market capitalization of less than $700 million and revenues of less than $125 million to opt out of complying with Section 404, the lawmakers said.

Critics of the law say the costs of Section 404 outweigh the benefits for smaller companies and may be forcing some companies to list their stock overseas due to compliance costs.

"Many of these costs were spent by companies that pose little risk to investors or companies where the cost of the compliance burden is clearly not with it for investors," Rep. Tom Feeney of Florida said in a statement.

Feeney and two other House lawmakers, Candice Miller of Michigan and Pete Sessions of Texas, plan to introduce the bill on Wednesday. In the Senate, Republican Jim DeMint of South Carolina is expected to soon propose a similar bill.

"There will be a companion bill in the Senate simultaneously," said DeMint's spokesman, Wesley Denton. "Senator DeMint believes we need to make America the best place in the world to do business and one of the ways to do that is to reform Sarbanes-Oxley."

The bill marks another step in a movement challenging the Sarbanes-Oxley law, which was passed by Congress after Enron Corp.'s accounting scandal and collapse.

An advisory panel to the U.S. Securities and Exchange Commission last month recommended exempting smaller companies from Section 404 requirements. Last week, SEC Chairman Christopher Cox said some changes were needed in the Sarbanes- Oxley law but gave no indication of what the agency might decide to do.

A SEC spokesman declined comment on the proposed House and Senate legislation .

The new bill would also call for less frequent external audits for companies that do not seek the Section 404 exemption after the first year in which attestation is required. Under the planned bill, at least 10 percent of those publicly traded companies that do no opt-out of complying with Section 404 would be subject to random external audits by the stock exchanges.

It would also set the threshold at which a transaction or process is considered "material" weakness for investors to know at 5 percent of the company's net profits.

http://today.reuters.com/investing/financeArticle.aspx?type=governmentFilingsNews&storyID=2006-0...