Christopher Cox, chairman of the U.S. Securities and Exchange Commission, on Thursday told attendees at a London international securities regulators event that upcoming modifications to the controversial Sarbanes-Oxley Act of 2002 (Sarbox) will be significant, and they’ll be meant to reduce associated costs to businesses while continuing to protect investors, the Associated Press reports via Boston.com.
Critics of the antifraud law have blasted it in recent days, saying the act is difficult to work with and the costs of compliance are too high. Just last week, Alan Greenspan, former head of the U.S. Federal Reserve, criticized Sarbox at an AMR Research leadership event in Boston.
Cox and four other SEC commissioners are expected to officially announce the rule modifications on Dec. 13 at a public meeting, according to the AP. Cox said at the London event that the SEC “will unveil significant changes” to Sarbox in relation to how firms document and prove their internal financial controls and how they address and correct associated issues, the AP reports.
“Those changes will be aimed at ensuring that the internal-control audit is top-down, risk-based, and focused on what truly matters to the integrity of a company’s financial statements,” Cox said, according to the AP.
Cox recently sent a letter to the independent oversight group for the financial industry requesting that it tailor its auditing rules to companies of all different sizes, and an SEC-appointed advisory committee last spring suggested that small firms shouldn’t have to comply with the internal-controls regulation, the AP reports. Though the SEC did not adopt the suggested change, it did say it would modify the way companies have to comply with act, and said it would offer guidance to different sized firms to help with the process, according to the AP.
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