To: Rule Comments
Dear Smaller Company Advisory Committee,
The Savannah Bancorp, Inc. (NasdaqNM: SAVB) is a 15 year old microcap company with $97 million in public float market cap as of 6/30/05 that is struggling with great effort and great challenge along with our independent accountants to successfully comply as a first time accelerated filer with the current larger company SOX 404 implementation rules in 2005.
We are very much in favor of the new rules and guidelines that are being proposed for smaller companies in 2006. At the same time, we are greatly distressed by the current requirements in 2005 for our independent accountants, BDO Seidman, LLP, to attest to our controls under the same rules as they do for larger companies.
We have estimated that there are less than 400 first time accelerated filers in 2005 that seem to be unfairly caught between the current larger company 2005 SOX 404 rules and the proposed rules for smaller companies to be approved in 2006.
We fervently request that the accelerated filer definition be increased to $100-125 million and/or all first time accelerated filers with market caps of $700 million or less be given the option of delaying SOX 404 implementation until the rules that will be applicable to them are completed and approved in 2006.
This action would need to happen at the December 14 Commission meeting to be of significant help to us in 2005. Our resources are being stretched to the limit and other very important business processes have been set aside solely to focus on SOX 404 implementation by 12/31/05. We have made great progress toward compliance but still face the prospect of limited success and significant additional audit costs under the current larger company rules.
We also agree with BDO Seidman LLP’s comment letter attached and dated 10/31/05, especially the comments related to substantive audit work on period end balances for smaller companies.
Thank you for your consideration of what we believe to be a very reasonable and fair request.
/s/ Robert B. Briscoe
Robert B. Briscoe
Attachment: BDO Seidman LLP’s comment letter, dated 10/31/05