SEC examines Sarbox for small business

In an effort to help smaller businesses implement the internal control requirements of the Sarbanes Oxley Act, the SEC has issued guidance to aid small businesses in understanding the regulations.

The guidelines, issued by Committee of Sponsoring Organizations of the Treadway Commission (COSO), were welcomed by SEC chief accountant Donald Nicolaisen as 'an important step forward in helping smaller businesses understand and apply COSO’s internal control framework in connection with implementing Section 404 of the Sarbanes-Oxley Act'.

'Section 404 is too important not to get right, but getting it right requires both effective and efficient implementation,' Nicolaisen said. 'The staff will continue to monitor and assess the effects of the internal control reporting rules on smaller public companies.'

COSO was formed in 1985 to sponsor the National Commission on Fraudulent Financial Reporting, an independent private sector initiative which studied fraudulent financial reporting and developed recommendations for public companies and auditors for the SEC and other regulators.