PCI Lauds SOX Bill

Legislation to ease the burden of Sarbanes-Oxley requirements on small businesses was introduced in the House on Wednesday, drawing praise from the Property Casualty Insurers Association of America.

Introduced by Rep. Tom Feeney, R-Fla., the Competitive and Open Markets that Protect and Enhance the Treatment of Entrepreneurs, or COMPETE Act, would establish alternative SOX requirements that smaller companies could comply with. It also would mandate the use of risk-based concepts in evaluating internal controls regarding financial reporting for all public companies

The bill calls for the Public Company Accounting Oversight Board to assess the efficiency of audit practices in its inspections of public accounting firms, and along with the Securities and Exchange Commission, to clearly define key terms in the SOX law for auditors and accountants.

“While the Sarbanes-Oxley Act gave investors the confidence to return to the marketplace following the Enron and WorldCom scandals, the time has come for Congress to reconsider many of its burdensome provisions that restrict the growth of smaller companies around the country,” said PCI president and chief executive officer Ernie Csiszar in a statement.

He added that for smaller companies compliance costs are “disproportionately arduous, hampering innovation, development and the cost of obtaining access to our nation's equity markets.”

Mr. Csiszar said the “sensible” legislation would give companies with a market cap of less than $700 million an alternate set of compliance requirements that would increase their ability to grow.

“This legislation will facilitate the competitiveness that open markets and innovation bring to our nation's economy,” he added. “Without changes of this nature, increasing numbers of smaller companies may choose to remain private, limiting their growth and damaging our nation's global competitiveness.”