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SEC releases ED for smaller companies.

The Exposure Draft (ED) of what will become the "Final Report of the Securities and Exchange Commission's Advisory Committee on Smaller Public Companies" was published for public comment in the Federal Register on March 3 with a 30-day comment period (ending April 3). Interested readers are encouraged to check the SEC website ( for an update on the comment period, comments received and actions taken.

The ED was anticipated to align fairly closely with the earlier "draft." Among the proposals that may have--if acted upon by the SEC--the most immediate effects, are proposed exemptions from certain provisions of Section 404 of the Sarbanes-Oxley Act for microcap and smallcap companies.

The ED makes 32 recommendations in total, some of which could potentially impact--directly or indirectly--large public companies and private companies with publicly-listed debt, as well as smaller public companies. These relate to auditing standards, materiality, the structure of the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and accounting standard-setting.

The ED includes separate dissenting statements filed by both members of the SEC committee representing Big Four firms; these relate mainly to the proposed exemptions of certain microcaps and smallcaps from Section 404.
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Title Annotation:Securities and Exchange Commission's Exposure Draft
Author:Heffes, Ellen M.
Publication:Financial Executive
Article Type:Brief article
Geographic Code:1USA
Date:Apr 1, 2006
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