SEC proposes easing accounting for smaller companies
The U.S. Securities & Exchange Commission voted Thursday to ease accounting requirements for smaller public companies, with the SEC collecting comment from the public for the next two months prior to any final regulation.
Under the SEC proposal, public companies with less than $100 million in annual revenue would not be required to have an outside auditor attest to the effectiveness of their internal financial controls, a key requirement of the Sarbanes-Oxley Act of 2002.
In a statement Thursday, SEC Chairman Jay Clayton said the proposed rule builds on the Jumpstart Our Business Startups Act of 2012 in sparing companies some of the costs of complying with accounting regulations, with the goal of pumping those savings into hiring and development.
Last June, the SEC amended its definition of a “smaller reporting company” to differentiate them from large corporations with large accounting staffs and audit firms, while maintaining “appropriate investor protections” in the words of the SEC.
Alex.Soule@scni.com; 203-842-2545; @casoulman