SEC gives SOX relief to smaller firms

The Securities and Exchange Commission yesterday approved a new accounting standard that would lower costs on Sarbanes-Oxley compliance. The new rule, the Public Company Accounting Oversight Board’s Auditing Standard No. 5, was approved by the SEC in a 5-0 vote. It provides guidance for smaller public companies—those with less than $75 million in market capitalization—in complying with section 404 of SOX in a cost effective manner. These smaller companies can also develop evaluation approaches that are specific to their size and circumstances, and have external auditors review them. Smaller businesses begin complying with the new rules when filing their2008 annual reports.