Subject: File No. S7-06-03
From: Monica Lee

March 10, 2008

Dear Ms. Morris,

This letter is in response to the request to comment on the Security and Exchange Commissions release proposing a further extension for the internal control requirements of Section 404 of the Sarbanes-Oxley Act of 2002 for small companies and the extension for newly formed public companies.

The Sarbanes-Oxley Act was enacted due to large amounts of fraud due to the companys internal control. Most of these frauds were due to small public companies, where there was misstatement in their financial reporting. Therefore, lead to less confidence in the U.S Capital markets in many investors. As a result, the Sarbanes-Oxley Act is to boost investors confidence in the capital market.

Whether it is an inside or outside auditor, an auditors job is to understand in and out, how the organization operates. They also have to asses and overlook the organizations financial statements. Therefore, the auditor should already be assessing the internal controls over the financial statements to determine any internal control deficiencies. Allowing more time for small companies to provide an auditor attestation report because the auditor is an outside auditor and not an inside auditor is not required, due to the fact that auditors know the company they are auditing.

I believe that small and large companies/organizations should already be complying with all the requirements of Section 404. Small public companies have been given enough time to comply with these requirements. By having another extension, it is allowing public companies to push it aside and not do anything about it and will continue if there are more extensions. It is time for small companies to follow the requirements like all the other companies. I also believe that if small companies are already following Section 404 requirements that it would be more effective, because it gives investors reinsurance that auditors are determining any internal control deficiencies, therefore investors know they are receiving reliable financial statements about companies they are investing in.

I do believe an extension is required for newly formed public companies. Allowing an extension for newly formed public companies, allows the management to understand and how to implement their internal controls. This also allows management to better understand these internal controls and will be able to change how they implement their internal controls to better suit that specific company. They will also be able to assess their internal controls with a better understanding if they have a longer period to implement and understand the company as a whole.

In conclusion, I feel that it is time that small companies should be complying with the requirements of Section 404 and should not be given any more extensions.

I appreciate this opportunity to comment on this proposal.


Monica Lee
2009 Accounting Graduate
University of Wisconsin-La Crosse