Responses to ACSPC Request for Public Input

Accounting/Auditing

Question 17. For smaller companies, would extended effective dates for new accounting standards ease the burden of implementation and reduce the costs in a desirable way? How would such extensions affect investors or markets? Would allowing a company's independent auditors to provide more implementation assistance than they are able to currently reduce such burdens or costs? Would such a step positively or negatively affect the quality of audits? Please explain.

a) [The Advisory Committee is particularly interested in responses to questions 18-20 from companies with a market capitalization of $100 million or less.]

The following answers have been received:

08/02/2005 17:44:12   Allow the auditors to assist in implementation would be a huge help for smaller companies. The auditors are in a good position to help because of company knowledge. It would reduce fees and the time spent.

08/03/2005 01:39:17   No. That is like getting cancer slowly. The problem is the cancer. Extensions are illogical. Doing the wrong thing slowly, is OK for the government, but lethal for business. Asking the auditors to help with implementation is like letting a drug dealer help your daughter to start slowly. The audit firms are totally irrational regarding the functionality of this level of auditing. It would allow the audit firms to further increase their billings. I don't see another benefit. Today, consultants do this work, and they are audit firms. The pretense that cross referring reduces conflict of interest is a transparent charade.

08/03/2005 07:01:34   We did very well for many years relying on the accountants, didnt we? A few bad apples come along and we overhaul the whole system. let the auditor's do more.

08/03/2005 08:55:04   Allowing exisiting auditors provide more of the implementation would be beneficial. Do not feel it would affect the audit since they are somewhat regulated themselves.

08/03/2005 08:58:39   Extending doesn't help but elimination will.

08/03/2005 10:40:26   No, it would just delay the end result. It would be of some help to allow the company's independent auditors to provide moe assistance. However, this does not address the problem for small companies which is the high costs of both implementation and ongoing compliance. (Our market cap is currently $22.8 million)

08/03/2005 12:17:58   yes. over kill is burdening the smaller companies and attempting to do all and run a business in a time constraint that is unacceptable is causing additional pain

08/03/2005 13:55:42   Not sure, if information flowed from the company and Sec would.

08/03/2005 15:01:40   Extending effective dates would be helpful. The biggest help would be to require external audit firms to complete the internal control assessments and testing as part of the normal audit rather than the cumbersome process that exists now with several firms performing various parts of the engagement with the external auditors doubling their fees to just review and certify what the others have done.

08/03/2005 15:22:49   Not really. Extended timing is not the issue. The increased workload of SOX is causing additions to staffing which is expensive.

08/03/2005 16:58:51   Additional time only delays the cost. Independent auditors should be able to let us know very timely what they will and won't accept.

08/03/2005 18:01:35   Please look into item no 29

08/03/2005 18:05:44   Allowing the independent auditors to provide more implementation assistance would reduce costs and burdens to the small company. It would not have any effect of the quality of the audit. The auditor will would still check to see if the company is complying with the measures in place.

08/03/2005 18:30:29   x

08/03/2005 19:54:33   I believe that a general relaxing of the requirements and standards for micro-cap companies is in order. I work for a State Department of Transportation, where the highway construction requirements must meet or exceed AASHTO standards. These requirements extend all the way dopwn to the small local municipalities, trying to repair an alley. Obviously, you cannot apply interstate highway standards on a small alley, but yet there they are. It's the same with SEC regulations. How can you expect a micro-cap company fulfill the requirements which a larger compamny might have an entire division set up for? The micro-cap companies have to be given more flexibility in the filing of accounting documentation.

08/03/2005 19:55:50   LESSEN INTEGRITY!

08/04/2005 09:17:19   Anymore extensions will take away from the importance of the regulation.

08/04/2005 09:39:15   A further extension would do nothing but delay smaller companies from beginning the process. We have 11 non-accelerated filer clients and when the first delay came out almost all of them killed their SOX implementation. Why? Because small companies do not have the reseurces or luxery to take on projects because they are a good idea. Small companies fight the fires that directly in front of them, not the ones that are two years away. If another delay is given until 2007, they will wait until the end of 2006 or beginning of 2007 to start their project.

08/04/2005 10:40:16   I think effective dates, as a generally rule, should be uniform. Allowing more help from auditors may help smaller companies without the in-house expertise. It would also help avoid misinterpretations that cause costly additional audit procedures and adjustments to a company's accounting recores.

08/04/2005 12:09:05   It's always helpful for smaller companies to get to learn from the larger companies. Again, we don't have the internal resources, so if the larger companies lead and set industry standards, we can then follow. It's unfair to ask us to do it at the same time, because it is the larger companies that set industry standards for disclosure, etc.

08/04/2005 13:38:24   Implementation assistance is greatly needed. Without it, costs increase.

08/04/2005 14:20:27   I will have our CFO give his opinion here.

08/04/2005 18:05:44   No

08/05/2005 10:54:31   Possibly reduce the cost if it could be phased in over two years. The problem in year one of SOX for large companies is that the PCAOB was changing procedures and defining items on a daily basis. This should now be done and smaller companies should reap the benefit of previous implementation.

08/05/2005 12:38:34   Auditor Independence = Integrity! See item #5 above

08/05/2005 12:44:28   Extended effective dates would probably be a good idea.

08/05/2005 15:34:53   Extensions will only put off the cost to a later date unless the requirements are eased. The work has to be done somewhere so either way the company will pay. Paying the accountants may be cheaper than some of the consultants that saw opportunties to make a one-time killing.

08/05/2005 15:43:46   (Assume you meant Auditing/Control standards) The extention only spread the cost over a longer period; that does not, per se, reduce the cost. Since it is not perceived that SOX improve investor confidence in small banks, the extension is a moot point. Greater involvement by the CPAs is a mixed blessing; they bring expertise but at a significant cost - they have already made propsals under PCAOB/SEC approved rules and the costs are very high. It is assumed that the costs SHOULD have a positive effect on the audit costs but one wonders what that says about independence or whether that becomes and "eye wink" to get around the small business issue instead of dealing with the reality.

08/05/2005 16:45:38   Possibly. In this area I have mixed feeliings. Smaller businesses do bear the brunt of regulatory changes, but they should be eventually required to follow along the generally accepted pinciples of business. Sudden regualtroy changes can mean that work previousl done is now a useless expense. Some stability in the financial code and enacting changes with a longer lead time would make more sense for markets and businesses alike, with an eye toward market stability (excpet in cases that brought about such changes as SOX - a necessity thankt to Enron, Tyco, Worldcom, AIG, Global Crossing and others.

08/05/2005 19:33:08   Yes, Yes, Yes. This would be very helpful especially if there was a 3 year group of compliance issues and even better, if our auditors could help the company comply over that period. Extentions would not hurt investor interest.

08/06/2005 13:52:06   Extended effective dates would reduce initial compliance costs since users and auditors would have a better understanding of how to implement them. Auditors providing more assistance is needed badly; they often know the client well enough to provide it very efficiently, and they would know more about what the client actually did, which weould improve the audit.

08/08/2005 11:10:11   yes to all

08/08/2005 11:39:29   The companies most affected are those who are accelerated filers of less than 150 million in capitalization (We do not fall into that category). Our capitalization is 60 million. However, once we cross the $75 million threashold, it becomes a severe burden with the annual report and 10K for both myself and the auditor. I feel that their is little to be gained from the 30 days completion of our annual report as a company would be foolish to disclose significant information in the annual report for the first time.

08/08/2005 14:06:10   I think extending dates for smaller companies is generally a good idea because they do not have the resources to comply in the timeframes allowed. I also think that audit firms should be allowed to assist smaller companies in implementation. I do not think that would have any negative impact on the quality of audits performed.

08/08/2005 15:43:24   No. Accounting standards aren't the problem. Implementing Sarbox 404 without smaller company rules is the problem.

08/08/2005 21:39:10   Any delay in compliance requirements would be beneficial, but may serve to prolong the potential for many companies to delist their securities.

08/09/2005 09:30:31   No. An extension is not the solution. A substantial reduction in the requirements is needed. We agree allowilng a companies independent auditors to provide more implementation assistance would help.

08/09/2005 16:26:34   Usually, the dates for new accounting standards are not a problem...the timing is long enough to allow succesful implementation. Allowing the independent auditor more implementation assistance would be beneficial...but it will be difficult as they are "afraid" where to draw the line. I don't see the audit quality affected.

08/09/2005 17:25:10   Smaller companies typically don't have resources to implement procedures as quicky as large companies thus additonal time is jusitifed. Yes, i think outside auditors shoud be able to counsel smaller companies who don't have internal expertise. I start with preposition that most firms are honorable and want to do it right and thus they will advise clients on best, and legal, practices. Their assistance wouldn't harm their ability to render an opinion on statements.

08/10/2005 09:04:41   no comment

08/10/2005 13:44:39   Extended implementation would certainly help. It seems to work out some of the bugs and works out some of the odd interpretations by accountant's and accounting firms.

08/10/2005 16:00:18   Help me understand how an extension could reduce the costs and ease the burden. Aren't you just delaying it?

08/10/2005 17:18:15   Yes, extensions of time would be of a great benefit. Extensions would have no effect on investors or markets - it would be disclosed and factored in by the reviewers. Assistance the auditor would be a great benefit, and shouldn't affect the quality of the audit in general. But humans will find a way act unethically in this manner as well.

08/10/2005 22:09:27   I think giving the external auditors a little more room to discuss certain situations would be a huge benefit to both parties. The crooked executive is going to be crooked, hang him when he is found and throw away the key. Make that point loud and clear, but make sure he/she is guilty.

08/11/2005 08:35:22   No.

08/11/2005 20:27:22   We are a smaller company (43M in revenues), I don't believe that new accounting standards and their implementation should be based on a company's size. Companies should be able to get assistance from auditors on understanding and implementation of new or existing standards, afterall they are the experts. Such steps makes the auditor smarter and know the company better and able to perform a higher quality audit.

08/12/2005 13:12:10   No opinion.

08/12/2005 14:46:45   Yes, as the larger companies and their external auditing counterparts review the approach of last year hopefully the smaller companies can benefit from their inefficiencies.

08/12/2005 16:35:01   Changing dates only delays the inevitable costs and burdens of SOX - it doesn't change them. Rather than delaying SOX, iit should be eliminated. If companies wish to follow it voluntarily, perhaps it is a competitive advantage for them in capital markets.

08/13/2005 12:39:43   Extended dates would help to give the companies more time to see the effects on larger companies first and to get and understanding of how the implementation is done. Probably not effect investor markets. Auditors could make the transition less costly because they already know our system and employees and would reduce the burden and costs. Believe that it would have no effect on the quality of audits

08/15/2005 13:08:27   Implementation assistance from auditors would improve efficiency and reduce costs. As for extending dates, accounting standards that are inconsistent accross the universe of public companies is problematical.

08/15/2005 14:27:30   Where were you when we needed you? It would have helped a lot last year. Independent auditor assistance is in danger of becoming an oxymoron but things have improved a bit since the PCAOB's May 16 release. I don't think a change in the rules is required as long as the rules are applied in the right environment.

08/15/2005 15:10:05   Extending the date would only give the impression that this is not important nor are having ANY controls over the public money they are stewards for. Just like you can not segregate duties easily in a small company, you should not have auditors assisting with the evaluation and design of controls that they will later attest to...especially since providing computer installations and tax services are now frowned upon...why would controls be different.

08/15/2005 15:13:01   Most of the accounting standards can be implemented by most companies. The problem that you have with defering dates is who is using this standard and who is using that standard. It just muddies the waters. Regarding auditor assistance, there certainly needs to be involvement on behalf of the auditor or the client might potentially implement an incorrect accounting. There needs to be a line drawn somewhere, but having your auditor tell you to do the research, write up the results and then submit it to them to concur/or not, is not the right approach or in the spirit of auditor/company relatioships. I believe the investing public understands and demands this as well.

08/15/2005 15:14:45   No. The use of common sense in accounting rules is more appropriate.

08/15/2005 16:33:43   extending the dates only puts off the burden- it will not lower the cost permanently. Furthermore- implementation assistance does not come free from the auditors who are stretched so thin that there service levels have diminished significantly.

08/15/2005 16:41:14   Probably. Not sure how auditors can do both SOX evaluation and implementation simultaneously.?

08/15/2005 18:59:52   Extending the dates doesn't change the fact that you have to deal with the changes. I don't think deferring dates makes a big difference.

08/16/2005 09:51:21   Unsure about question. If you mean extending effective date of SOX, I think it makes sense. COSO has not yet issued small company guidance and accelerated filers have not yet been through a round of PCAOB audits for year 2.

08/16/2005 10:10:36   Extension of filing dates for SEC reports would help, because audits must be crammed by independent accountants in such as short period of time and therefore companies have less time to prepare and close their books, leading to a higher possibiity of making errors that will be classified as material.

08/16/2005 10:21:17   No. Yes, we need help from our auditors to implement new accounting standards like SFAS 123R; unfortunately, the auditors feel the PCAOB is telling them not to support / advise management.

08/16/2005 10:26:28   step-wise approach OK to a point, auditors will always be able to support what the market and regulators need. Let big companies do the work and establish best practice, smaller companies can follow after

08/16/2005 10:42:02   1) Yes, more time would help for complex implementations. More importantly, though, implementation guidance for major issues such as 404, FAS 123R and others has been issued far too late, leaving companies (large and small) in a very bad position. Implementation timing should be tied to the issuance of implementation guidance, not from issuance of the standard. 2) Investors don't understand most accounting changes and would prefer not to have them at all, so many would probably prefer to delay implementations. 3) Slightly, but allowing audit firms too much leverage in standards implementations will lead to abuse on their part (that's what happened with Section 404b) 4) No change at the end of the day.

08/16/2005 10:44:16   Extension might help, however implementation in a smaller environment should be much more straight forward than in huge multinational environment.

08/16/2005 10:45:16   Yes, would help us speard the cost

08/16/2005 11:18:54   Extending the effective dates for smaller companies would be beneficial since smaller companies frequently look to how larger companies implemented a standard for guidance, and the extended time frame would provide more examples. I don't think such a move would affect investors or markets significaly, if at all, since we are talking about small cap companies here. Allowing auditors to help with implementation only makes sense. They are familiar with the company and could provide the help in the most cost effective, efficient manner. Also, it seems to me like the whole approach to this is insulting to everyone who prepares or audits financial information. The rules seem to assume that everyone is going to try to commit fraud or make numerous errors, that noone tries to do their job in a competent manner and is honest. Instead, everyone is assumed to be dishonest and incompetent until proven otherwise by the myriad of rules and regulations that have been developed.

08/16/2005 11:52:16   Allowing the accountants to discuss more would be most helpful. That is the single most negative thing about SOX.

08/16/2005 12:15:34   I don't think that extending the dates would ease the burden. Having the auditors provide implementation assistance would certainly help the process. Ultimately, it is manangement that has to take responsibility for the financial statements and the auditors are still going to be overly cautious in their audits due to the recent scandals that have happened.

08/16/2005 12:40:54   No,No, yes positively

08/16/2005 12:42:56   No. The only thing that would help is exemption.

08/16/2005 13:04:14   Delaying the SOX effective date would ease the hiring problem since the supplyof qualified personnel available to help with 404 compliance is substantially less than demand. Spreading out compliance would ease this problem. Delaying implementation of new accounting standards for stock options makes sense since small businesses were not planning on expensing stock options when they were issued, but under FASB 123(r), we will need to expense the unabmortized portion of options as they vest over the next three years. Allowing our auditors to help us implement 404 would be a big help and would most likely lower our compliance costs. I would think the auditor's involvement would improve the quality of the audit since the auditors would be documenting the changes in controls, the reasoning behind the changes, and could be assessing the effectiveness of the controls as implementation proceeds.

08/16/2005 13:12:04   Yes, extensions help... but the ultimate burden is still there and no matter if the compliance is pushed-out, ultimately the outcome is the same. The extra time just gives more opportunity to seek ways to exit the public company arena.

08/16/2005 13:19:29   In the absence of a total reprieve from the accounting standards (which I believe is appropriate), an extension of the effective date is almost mandatory. Speaking on behalf of our shareholders, they are unhappy with the burden we are facing. They feel they had perfectly fine disclosure before SOX 404, and are exceptionally unhappy at the cost it is forcing upon us. Changes in what the independent auditors can or cannot do only shifts the recipient of a smaller companies money, because we will either be forced to pay them or pay someone else. Given the burden that the independent auditor takes on (post Arthur Anderson) in attesting to our controls, I do not see a problem with them providing more implementation assistance. Since they are the ones who ultimately have to sign off on their being acceptible, there is no reason they should not be allowed to assist in implementation. (We are a company market cap well under $100 million).

08/16/2005 13:20:23   No. Allowing differentiated application of standards undermines the credibility of the US financial reporting system. Implentation costs are exacerbated through poor planning and poor commitment of resources to finance by a lot of companies, and this behaviour feeds that problem.

08/16/2005 13:25:32   In general, I've found that both the SEC and the FASB have been reasonable in allowing time to comply with their more time consuming pronouncements. Allowing more implementation assistance might restore some value to the services auditors provide.

08/16/2005 13:27:00   See my answer to question 16 above.

08/16/2005 13:30:33   Yes, we need to go through training for many of these new standards. It is difficult to find time for such training.

08/16/2005 14:08:05   Extending the effective dates wouldn't matter that much in terms of burden or cost. Extension would also confuse the financial markets as disclosure of such extensions would force the reader to the footnotes and would make machine generated comparisons impractical. Allowing independent auditors to help on implementation would great help implementation, reduce costs and improve the quality of audits. They are the accounting experts and transferring knowledge to companies is helpful.

08/16/2005 14:23:10   The extended effective dates for accounting standards gives the smaller companies an opportunity to learn from larger companies. Allowing a companies independent auditors to provide implementation assistance will probably improve the quality of reporting since they are in the best positon to understand the specific issue at the company and the standard.

08/16/2005 14:54:27   Extended dates for small companies would reduce the cost and the burden of implementation of new accounting standards. The extended date would allow the large complex companies to "learn" the new standards first and allow the small companies to learn from them.

08/16/2005 15:15:12   Delaying the implementation of new account standards would only delay the inevitable cost. Redifining how the new standards will be applied is what is needed. Allowing the independent auditors the ability to be more helpful would be a definite step in the right direction. They are the experts with accounting requirements and they are hired for this expertise. Let them help us, not second guess us.

08/16/2005 16:08:50   See question 15. Allowing the company's independent auditor to help woudl be of benefit.

08/16/2005 16:16:04   Yes, this has always helped.

08/16/2005 16:45:09   We don't see extending effective dates as desirable. It leaves more uncertainty in the minds of the users of the financial statements. Allowing auditors to provide more assistance would be beneficial and not negatively impact independence at a small company. A small company doesn't have the ability to influence its auditors.

08/16/2005 18:35:41   Extendung effective dates would be desirable by getting smaller companies away from the leading edge where challenges are new, methods untried, and costs are high. The current environment in which a small company can seek no expert advice from its auditor, lest it be found to have inadequate controls, is nuts, and should be changed. There is no reason why it should adversely affect the quality of audits.

08/16/2005 21:29:07   Any timing and CPA assistance relief would be a help to snall business, as the cost of compliance could be reduced and spread over a greater time period.

08/16/2005 21:40:38   No. Extensions just defer the pain.

08/17/2005 10:59:57   Extended dates might actually increase cost as consultants and auditors can keep their clocks running longer during the implementation phase.

08/17/2005 12:28:22   Our auditor helped us quitr a bit, but the PCAOB kept changing the standard as we were implementing it and therefore caused us all to redo work already completed. Poor implementation of these rules. If we operated that way, we would not have too many customers left.

08/17/2005 12:36:00   Extending effective dates delays the burden but probably does not reduce costs. Again, I don't see this as a huge concern for investors and is not likely to affect their decisions either way. I do think greater implementation assistance would reduce burdens and costs and would positively affect the quality of the audits.

08/17/2005 16:18:39   No - it just postpones the pain, it does not eliminate the pain.

08/17/2005 18:49:20   This is an area where differing effective dates would make sense. The rules would be the same but it would allow smaller companies more time to assess the impact of new accounting rules which is fine as long as full disclosure is also required.

08/17/2005 18:49:27   Extending the date does help somewhat, but the real issue is what you need to do once you get there not do you get an extra quarter to comply. Our independent auditors are so expense I do not want to use them for implementing anythign.

08/17/2005 19:31:08   I don't think we need extensions. In most cases our businesses are small enough, that the impact of accounting regulation changes is easy to determine.

08/17/2005 21:27:12   Yes. Yes. This would increase the quality of the audits.

08/17/2005 22:55:14   Extending implementation dates for all companies, regardless of size, would be a good thing. Due to staffing constraints at small companies, compared to larger companies, shorter implementation timing exacerbates the problem. Extending the effective dates would ease the burden of implementation at small companies. Investors would still want to know what the impact would be at a small company, so markets may discount projections until the impact of a change was understood. Alowing the independent auditors to provide more implementation assistance would reduce the burden, and possibly the cost, of implementation through more effective use of company time and lessening the burden of paying another set of experts. I don't think such a step would affect audit quality.

08/18/2005 08:03:31   No, it only delay the burden and hopefully the rules will change after seeing the damaging result.

08/19/2005 02:56:12   Deferring effective dates isn't a good idea, but changing how compliance is addressed is good. Also, providing better guidance to auditors about integration would be really appreciated - the last guidance the SEC issued was helpful, but its a chicken and egg arguement. Until the SEC or PCAOB provides better guidnace, audit firms will do as much work as possible.

08/19/2005 11:44:44   Yes it would ease the burden and positively affect the quality of information and the quality of audits. This would allow for a healthy dialogue to occur which is essential for every successful business transaction.

08/19/2005 13:49:01   Extensions of time are not a factor associated with the cost of implementing accounting standards or SEC regulations. The major cause of excessive costs is caused by a reluctance on the part of the auditing firms to give advice and guidance coupled with the redundant efforts that some of the new regulations require, such as limited reliance on management´s testing and documentation, and the redundancy of testing that is performed during the auditor´s attestation efforts, as referred to in Question 12. Permitting a company´s auditors to provide assistance would enable a company to focus its efforts to achieve a desired, and expected, outcome rather than expending non-directed efforts or efforts being directed by a third-party consultant – at added cost.

08/19/2005 14:40:28   Extension of future implementation dates for new accounting standards should be considered for any new FASB that require extensive efforts (i.e. FAS 133, or similar) Sharing of implementation guidelines by the audit firms (previously standard proactive amongst the Big Four) would ease the burden of implmentation on smaller public companies.

08/19/2005 14:50:07   Allowing the independent auditors to provide more implementation assistance would certainly be a benefit. It boils down to a timing issue, either they provide assistance at the onset or they will critize and cite corrective action. Either way, they will untimately be determining compliance.

08/19/2005 17:03:28   Extending effective dates does ease the burden, as the smaller companies have more time to think through the changes and possibly see how the larger companies have implemented the changes. Auditors should be given more clear guidance on how they can and cannot assist companies. Under the current rules, some firms are taking a very strict stance on this since the rules are not clear.

08/21/2005 04:46:26   No. If you have to do it postponing does not help and may have a negative effect on relationship with investors.

08/21/2005 22:19:50   Yes. Allowing independent auditors to provide more assistance would greatly improve the circumstances of a smaller company.

08/22/2005 14:21:23   Yes, it would certainly help and I don't think it would affect investors or markets. Independent Auditors should be able to help but not completely implement a program. These individuals are certified to a high professional level, they can only help. I don't think it would affect the audit

08/22/2005 15:20:23   Small companies should not have a longer timeframe because it affects comparability and consistency of financial reporting. Effective dates should take into account the implementation burdens on small companies. Auditors should be able to assist companies in implementation. I don't believe this affects their independence, as I believe that both parties are motivated to get it right. Collaboration most often will create the best result. It seems silly and inefficient to make the company assess the situation independently when they could rely on their auditors who likely have more experience on the issue from working with other clients and regulatory bodies.

08/22/2005 15:47:02   Yes. Would not affect the investors markets. Yes, small companies can not afford to go to multiple sources for advice. I do not wee why the audits can not still be objective.

08/22/2005 15:47:34   Extended effective dates would allow companies to spread the cost over a longer period of time, but doesn't solve the problem of SOX being inappropriate for smaller companies. I no longer trust our independent auditors to act in the capacity of providing implementation. Based on their behavior to date, they would only use that opportunity to gather enough ammunition to blast us out of the water for nit picking little trivia. And, I would be paying for the privilege. No thanks!

08/22/2005 17:54:28   I think the current dates are workable for smaller companies and should not change again. I do not want our auditors doing more work on SOX--the current status is OK. Keeping the auditors on a narrow path is one of the improvements which has come out of SOX.

08/22/2005 17:56:59   No. The requirement for smaller companies should be dropped all together.

08/22/2005 19:27:18   NO. I think this wouldbe too confusing in the audit world to have two sets of rules. You can't expect the investment communitiy to understand GAAP today let alone two companies in the same industry may have two sets of rules.

08/22/2005 20:10:17   I don't think extending dates would be advantageous. With so many accounting professionals in the loop, it would prove to be more confusing.

08/23/2005 00:42:38   extending dates is good as it allows larger companies to bear the learning curve cost with auditors. auditors should then be allowed to help in implementation. impact on audits would be neutral.

08/23/2005 15:56:30   More time would help. It would allow CPA firms to learn best practices related to efficient attestation methods. Smaller companies, as a result, would be able to put the work out for bids, thereby ensureing that they are not being overcharged. Currently NO CPA FIRM will even estimated the costs involved. They will provide bids for audit work but the cost for attestation is left open ended.

08/23/2005 16:06:08   I think there is generally enough lead time to implement issues. Extensions generally just create procrastination.

08/23/2005 16:49:34   Due to the manpower requiements more time would help. By allowing auditors to provide assistance would also help due to extremely complicated regulations of SOX.

08/23/2005 18:10:00   One consistent standard is preferred.

08/23/2005 21:11:03   Unknown. The public auditors MUST be given more latitude to provide advice and counsel to their smaller customers. The smaller companies have the least amount of technical experience in creating the controls and environments necessary to comply. There are too few small company public auditors available/willing to provide advice as a secondary advisor when the small companies' public auditor is unwilling/prevented from provideing guidance.

08/24/2005 08:50:18   Without question. The cost to us has been significant, and it will get considerably worse if we have to remediate everything by (essentially) June 30 of next year. We could use more internal resources with an extension saving us substantial dollars.

08/24/2005 10:14:02   Dererrals of implmentation dates is not a soloution. The SEC needs to determine what is really appropriate and of alue for small businesses and then either exempt, modify, or implment.

08/24/2005 11:28:21   I would not support exteded effective dates for compliance with accounting standards for smaller companies. Companies can always use outside firms for assistance with implementation of new accounting standards.

08/24/2005 12:24:07   Yes, extending would help reduce cost, but reducing the requirements would balance cost and benefit much better than extending deadlines.

08/24/2005 14:30:13   Yes. Smaller companies don't have the resources that larger entities do to meet all the various standards, filing dates, etc. A phase in would help to allow time to assess and implement.

08/24/2005 16:19:27   It is subjective -certain pronouncements take very little time, others more time. This concept of independent auditors is out of control. Of course we need their assistance and they would be no less "independent." Give me a break, the audits are already way overboard. It would have NO EFFECT on their audits except to maybe reduce the costs.

08/24/2005 16:26:56   Delaying effective dates for accounting standards would not seem to provide any significant advantage for smaller companies. However, allowing independent auditors to provide implementation assistance would clearly reduce costs and lead to better quality audits, without impairing independence.

08/24/2005 16:54:47   More implementation assistance would be a huge benefit

08/24/2005 20:16:09   Yes. We need to have the assistance from out auditors on implementing new accounting rules. We do not have the time or resources to do this internally. It would positively impact the quality of audits as the accounting would be correct the first time!

08/25/2005 15:23:41   It is apparent that most of these new standards relate to larger companies with complicated organizational structures. Therefore, many of the standards do not apply to the smaller organizations so extended effective dates would not materially impact a small firm. Allowing the auditors to aid the Company would be beneficial. This would have a positive affect on the quality of the audits.

08/25/2005 16:04:36   No.

08/25/2005 17:02:43   Extended dates would ease the burden somewhat as it would better allow auditors, management and the marketplace to understand if new standards are useful in business in general.

08/26/2005 12:41:42   Allowing audit firms to provide a higher level of assistance to small public companies is just being realistic. This should have no impact on the quality of the audits.

08/26/2005 13:07:22   No Comment.

08/26/2005 15:31:29   No

08/26/2005 16:22:08   No. Again, they need to comply with the rules.

08/26/2005 17:46:13   The whole issue should be re-evaluated for smaller companies. The msall ocmpanies need the kind of services they used to get from the audit firms. Now management is all alone - with the back to the wall - and why? We need to be able to have partners we can consult with.

08/27/2005 11:21:03   Probably only a little. Companies can invest a little more cash and get quicker reporting - that is still the universal truth. Easing the reporting timing requirements would allow companies to just spend a little less. Allowing the auditors to provide more advice would be a definite plus. For smaller companies, the auditors are by far the most qualified to exercise this judgment. Bringing in other SEC-qualified firms to do this before the auditors get it will just create more problems and more expense. Have you ever seen a fight over an accounting rule interpretation between 2 smaller accounting firms? Not pretty and not productive. Rarely do they solve such differences amicably. Such a step would change the quality of audits, but only at a great cost. A more efficient way of improving audit quality is the SEC tri-annual public company report review process. That process could be made more efficient by allowing bi-annual reviews by SEC for smaller companies using proportionately smaller review budgets. The current method of allocating 40 hours for a reviewer to examine smaller public company filings is excessive and not fruitful in many cases.

08/28/2005 23:37:43   10-Q reporting limits should remain at 45 days. Most small cap firms have one or at the most 2 FTE available to prepare these reports, alogn with other significant duties.

08/29/2005 07:07:37   Extensions wouldn't change much. Allowing independent auditors to provide more assistance is positive.

08/29/2005 10:21:15   Extended effective dates do provide an opportunity to see how others have adopted before you, and that necessarily eases cost constraints. However, extended dates are not the answer to most underlying concerns. Certainly, having assistance from external auditors in applying new guidance is a significant help to smaller companies because the audit provides value and efficiency in that small companies do not have to hire a suite of experts to solely manage all accounting and tax issues/guidance.

08/29/2005 10:21:25   Extended effective dates do provide an opportunity to see how others have adopted before you, and that necessarily eases cost constraints. However, extended dates are not the answer to most underlying concerns. Certainly, having assistance from external auditors in applying new guidance is a significant help to smaller companies because the audit provides value and efficiency in that small companies do not have to hire a suite of experts to solely manage all accounting and tax issues/guidance.

08/29/2005 11:21:29   The independent auditors should be able to assist with implementation of new accounting standards because small companies may not have the resources large companies have. Every effort should be made to assist small business and lessen their burden. Such extension should not affect the markets.

08/29/2005 14:18:47   Extended effective dates would dampen comparability among company´s financial statements and impede effective analysis by investors. Conceivably, a longer window for smaller companies in applying standards also might also encourage them to partake in riskier activities that their larger brethren might not have available to them. A two-tiered disclosure regime might wind up costing more regulatory effort later. As I said earlier, I believe the auditors serve a different constituency - the shareholders - and they should not serve in an advisory capacity to management - even for implementation assistance.

08/29/2005 14:53:30   No, however letting small companies use their auditors for advice on applicability and methods of implementation of GAAP would reduce costs. How would such extensions affect investors or markets? Would allowing a company´s independent auditors to provide more implementation assistance than they are able to currently reduce such burdens or costs? Yes, in particular with respect to GAAP, FASB, etc. Would such a step positively or negatively affect the quality of audits? Positively. Please explain. It would reduce the cost of being public, since companies now need to either employ a GAAP expert or retain two firms, one to help review and implement new GAAP and another to act as auditor.

08/29/2005 15:31:21   Extended effective dates would definitely ease the burden of implementation because regular job activities for those involved in the project would not have to be interrupted as much and the company would not have to out-source so much of the project, thus providing a tremendous cost savings. Allowing auditors to provide more assistance and extending the deadline date would allow management to implement a better system for testing controls and identifying and fixing control deficiencies. This would not negatively affect the quality of audits as the auditor would still test managment's understanding of an overall process and implementation of recommended procedures.

08/29/2005 16:10:53   The dates have been extended. The extensions would have little effect on the markets or investors.

08/29/2005 16:20:53   It might ease the burden of implementation but the cost is still prohibitive. In our case, approximately 10% of our annual net earnings will be expended to be 404 compliant.

08/29/2005 17:09:27   Extending dates on standards does help in providing the limited staff of smaller companies time to familiarize and implement. Additional guidance from external auditors is crucial.

08/29/2005 17:12:26   Yes extended effective dates would be helpful. It would give us more time and we could benefit from the experiences of the larger companies who implement before us and for our independent auditors to gain more experience also. Also I am in favor of allowing the company's independent auditors to provide more implementation assistance. I beleive the auditors and the company could do this in a professional manner that would not negatively effect the audit and would in fact be a positive factor.

08/29/2005 17:12:43   Extended time to comply would be beneficial. Smaller public companies have historically relied on their auditors for guidance on implementing/evaluating new standards.

08/29/2005 17:36:32   Unable to comment

08/29/2005 19:02:32   Extended due dates only put off the inevitable. The ongoing expense and time commitment are the problem and I do not believe it will do much to protect the investor. Anythig the auditor can do to help would be of assistance as he already is familiar with SOX and the running of our business.

08/29/2005 19:05:24   The basic issue is not the time allowed to implement new accounting standards; rather it´s the complexity of the new accounting standards. While allowing auditors to provide additional implementation assistance would be helpful, our experience is that even the national accounting firms are overwhelmed by the magnitude and complexity of the new rules. Given the current complexity and volume of new standards and rules, we support both an extension in the effective date for small companies as well as allowing the independent auditors to provide additional support. We believe allowing auditor´s to assist in implementation would enhance the quality of the audit as we could more efficiently address various technical and documentation issues during the implementation period rather than post-implementation.

08/29/2005 21:00:01   More implementation assistance from auditors would only increase the cost, but yes, I believe extensions would be appropriate for smaller companies. I don't think the extensions should negatively affect either investors or auditors. It would just give the company more time to implement a new standard as well as look at how larger companies have implemented the new standard. For example, with the new FAS123R standard, smaller companies do not want to be the thought leaders in either using the Black-Scholes or binomial model, or reduce options and increase RSU's, or a handful of other decisions that will be made based upon the new FAS123R standard. Rather smaller companies would like to look at the larger companies and see how

08/29/2005 22:40:58   Yes, any extension of effective dates for small companies would help to see the effect of reporting requirements on larger companies.

08/30/2005 15:04:16   No to all the questions! The issue is not the time nor resources who can do the job. The problem is the excessive requirements of the rules. The answer is to eliminate 2/3 of the requirements.

08/30/2005 15:07:00   Extended effective dates would be helpful. The independent auditors being allowed to provide implementation assistance would be helpful and reduce the burden. The cost would probably not be reduced, but company's ability to reduce distractions and focus on their business would be increased. Auditors assistance in highly technical areas would improve the quality of the published financial statements.

08/30/2005 17:08:46   We do not necessarily perceive a need to extend the effective dates for new accounting standards for smaller companies. We believe that auditor assistance with implementation of complex accounting standards is highly desirable. The overall quality of audits could be improved by the auditors being involved up front in the implementation of a new accounting standard primarily because of the familiarity the auditors would obtain with regard to the specific issues associated with the implementation of a new complex accounting standard.

08/30/2005 18:26:14   Extended effective dates would unquestionably ease the burden and cost because more time would allow small companies to utilize their limited internal resources to comply rather than seek external, more expensive, resources to meet the deadline. Allowing a company´s auditors to provide more assistance would also help because it would eliminate the duplicative cost of engaging a separate accounting firm for assistance. The quality of audits would be positively affected because auditors would have a more thorough understanding of the approach management has taken regarding new accounting standards.

08/30/2005 18:48:02   Yes. If the standards cannot be changed I suggest phasing the new accounting standards in over 3 years. The investors and the markets are capable of taking care of themselves over that 3 years. As for independent auditors providing more implementation assistance -- not a good idea. Let's keep the independent auditors independent.

08/30/2005 18:51:48   We believe that extended effective dates for new accounting standards would ease the burden of implementation. Allowing our auditors to provide us guidance and implementation assistance in implementing these standards would be of greater help. With a small accounting staff, it is difficult to do the necessary research to implement new standards without some external guidance.

08/30/2005 19:47:16   Depending upon the standard, it may be appropriate to extend the effective dates. Yes, allowing the company's independent auditors to provide more assistance would reduce the burden of implemenation and would not affect the audit quality because they are assisting only, the financial statements continue to remain the responsibility of management.

08/30/2005 21:07:56   Yes, an extention would help as would implementation assistance by auditors.

08/30/2005 21:39:41   Yes, for smaller companies, extended effective dates would definitely ease the burden and reduce costs in a desirable way. Specifically, it would allow management sufficient time to complete its assessment without need to incur substantial fees to engage an outside consulting firm. We further believe that, based on conversations with our large institutional shareholders, they would have no problem with such extensions. Lastly, we would support flexibility to permit auditors to provide more implementation assistance, but we do not believe that this would significantly reduce costs or affect the quality of audits.

08/30/2005 23:57:28   It would allowing independent auditors to provide more implementation assistance than they are able to currently reduce such burders and costs.

08/31/2005 08:31:59   Yes, extending the dates and allowing the independent auditors to assist would definitely ease the burden. It would not reduce the costs. It would not have any impact on the investors or markets because the analysts will layer the impact into their projections.

08/31/2005 10:19:14   Extended effective dates for new accounting standards will ease the burden for smaller companies, allowing them to spead the implementation over a longer period of time, and thus allowing them to utilize more internal resources and less external consulting resources. Such extensions may lead to a higher perceived risk on the part of investors. It would help if the small company's auditors were allowed to provide implementation assistance; this would create greater efficiency in the implementation project without much if any compromise to auditor independence.

08/31/2005 14:00:12   Implementation deadlines should be the same for new pronouncements. It does make sense to allow more auditor assistance to smaller companies - why should every small company have a FAS 109, 148 , 132 etc expert.

08/31/2005 14:00:16   Extending effective dates can be helpful for smaller companies - a temporary benefit. Allowing auditors to provide implementation assitance would be helpful - and if auditors are doing their jobs properly, it should not negatively impact the quality of the audit.

08/31/2005 14:12:37   Extended effective dates are unlikely to accomplish more than a delay of the inevitable The problem for smaller companies is not one of time, but of having the resources to accomplish what is required by current accounting standards. For example, many of the new standards rely heavily on the outcomes of fair value analyses that few small companies have the in-house expertise to complete. Additionally, the complexity of current accounting rules often require small companies to engage third parties to assist with interpreting these rules and applying them to particular company transactions. This outsourcing to third parties comes at a significant cost to the average small company. An extension of time will not resolve these issues, but merely postpone the inevitable outlay of resources to comply with the applicable standards. Allowing a company´s external auditors to provide more implementation assistance would help to reduce these costs by removing the need to engage other third parties´ assistance.

08/31/2005 14:25:37   For the banking industry delays or extensions will never reduce the cost. The testing and documentation and retesting cost will always be there. In banking our independent auditors have always helped us until SOX. Now our independent auditors and accounting treat us as a group of crooks. PCAOB and SOX has created a wall of distrust that can never be overcome.

08/31/2005 14:32:46   I believe there's no need to extend effective dates for new accounting standards. Adequate time seems to be given when changes are required. The challenge for the smaller companies is to dedicate the time to watch for these changes and make sure they get implemented. If you are not constantly monitoring for changes, that is when they sneak up on you and create a reporting problem.

08/31/2005 15:19:27   Maybe - the consultants and acctg firms are controlling the costs. As long as demand is high and supply limited, the costs will not come down. Extensions would have little impact on investors or the markets. I think they are expected at this point. Allowing the auditors to provide more assistance would certainly help and reduce costs. That is the biggest issue currently as many auditors are having problems with work that was not prepared by them or in strict compliance with their interpretation of the Sarbanes Oxley act. That has been very frustrating to companies. I don't think that this would negatively impact the quality of an audit as many firms are having difficulty interpretting work performed by other firms that they need to rely on anyway. So they are adding this work to their audit and not really sure what was done. At least if they were involved from start to finish they would actually have more in depth understanding of their clients.

08/31/2005 16:05:33   Yes because in house staff could set-up the programs rather then having outside consultants and accounting firms which are very costly. I don't think it would have an effect on ivestors or markets. Yes having the independent audits more involved could cut expenses. I don't believe it would have an effect on quality of audits.

08/31/2005 16:13:45   Investors in smaller companies would not be negativley impacted by extended dates for implementation of new accounting standards. Permitting assistance from indedepent auditors would aid in reducing cost and providing for accruate information. The quality of audits would be positively impacted.

08/31/2005 16:16:33   17. Extending effective dates for new accounting standards would not ease the burden of implementation or reduce costs. Smaller companies simply need templates and guidance in implementing these new accounting standards. By utilizing the learning curve experienced by larger companies, smaller companies need to take advantage of this efficiency opportunity. Whether the deadline remains firm or is pushed back, these companies still need to plan to implement the standards. The PCAOB could help smaller companies the most by providing specific guidance or standards for them to use. Whether the auditors or another third party completed the work, the costs would remain high if the smaller companies are not provided specific guidance.

08/31/2005 16:29:59   yes. no, let independent auditors assist. In 20 years have not had a bad quality audit.

08/31/2005 17:16:33   If 404 was postponed or eliminated for small companies I don't think there would be a blip in the markets. If the companies auditors offered implementation assistance that only provides the same cost plus mark up. It's going to be just that more expensvie.

08/31/2005 17:57:10   Yes smaller companies need more time as they cannot afford the additional dedicated staff or consultants that large companies can for the initial implementation.

08/31/2005 18:22:30   We believe effective dates should be extended for smaller companies as they possess more limited resources to monitor and implement new standards than larger companies. Extending effective dates would allow the accounting industry to fully educate itself at a measured paced. When a new standard is issued, it takes time to digest, consider the ramifications and for best practices to emerge. Smaller companies have limited resources to monitor and digest new standards. Currently, small companies are trying to determine and digest new standards at the same pace as the Fortune 1,000 companies. With additional time, these practices will have a greater opportunity of being disseminated to smaller companies. In addition, we believe effective dates ought to be easy to understand for all companies. We believe each standard should have just two effective dates: one date for larger companies and a later date for smaller companies. For example, having different effective dates for recognition, measurement, classification and disclosure only adds to the complexity. It would be a significant assistance for smaller companies if they always had an additional year to implement new accounting standards. In this way, the smaller companies could look to the leadership of the larger companies to obtain examples of the accounting and disclosures, to hear the implementation questions developed and answered, and to be able to not be on the cutting edge. We believe effective date extensions would have minimal impact on the financial markets. Large companies (20% of all companies) represent 94% of the market´s capitalization, medium companies (30% of all companies) represent 5%, and small companies (50% of all companies) represent the remaining 1%. It stands to reason the impact on the financial markets would be minimal as small companies represent a small portion of the market´s capitalization. We believe that most analysts are proficient in determining the financial statement implications of new standards at a high level and that the current disclosures of recently issued not yet effective accounting standards alert investors and analysts to possible watershed impact of new standards. We believe auditors currently have adequate flexibility to assist companies in adopting new standards consistent with the Commission Statement on Implementation of Internal Control Reporting Requirements, dated May 16, 2005. Management ultimately must make the decision and choose appropriate application. Allowing a company's external auditors to provide adequate implementation assistance improves the quality of audits, since the auditor is more likely to be involved at an earlier stage (providing more timely application of correct accounting) and would more likely be more thoroughly involved in assessing the reasonableness of the estimates and judgments used. As to this latter point, if an auditor is involved it is more likely at an earlier time, whereas in most cases the use of an outside party to perform an estimate or calculation results in obtaining an answer very close to a filing date, and at that time a reasonable level of second-guessing the estimates and judgments, as the deadline for filing nears, is not well appreciated by the client or by the outside expert. Audit quality is better on those clients that involve the auditor early and that involve the auditor in assessing the correct accounting for a transaction, as opposed to those clients where they present the auditor with a fait accompli in the form of an outside expert's view, which in many cases is the view of someone not particularly well informed (and not very thorough) with the requirements of the accounting literature.

08/31/2005 18:23:08   Yes, having extended dates would reduce costs because a company could utilize the resources internal, have time to adjust to the changes, and benefit from learnings from others. As long as the information is disclosed (the change, effective date, impact, etc), then there should be no impact to the investor community. Yes, allowing the independent auditors to provide more assistance would save money as they already know the client, but it would negatively impact the quality of the audit if their independence were impaired.

08/31/2005 19:16:05   17. For smaller companies we need either more assistance from our auditors to interpret standards or simpler standards.

08/31/2005 20:55:07   I do not think smaller companies need extra time to implement, however prohibiting the auditor from assisting the smaller firm makse no sense. The auditor has the skills, tools and experience to get it done accurately and timely. If it is done right then how can that be a negative on the audit process?

09/01/2005 00:55:31   No - effort is big no matter what the timeline.

09/01/2005 11:40:19   No, I think this would cause confusion among the investing public.

09/01/2005 14:30:54   Extending effective dates does ease the burden in the short run, but only delays the inevitable. The complete exemption from compliance for small companies would be a more pragmatic decision. For reasons stated in answers to many of the other questions, the extension or exemption would not affect investors or the markets. Investors are still going to focus on the business model and potential for growth and pay little attention to compliance with mandated controls, documentation and testing that most investors do not understand. Because the independent auditors have a thorough knowledge of the company that they are auditing, any help in implementation would be far less burdensome and cost effective than hiring another consultant or accounting form to assist in the work. Most small companies do not have the internal manpower to complete the implementation. The assistance of the independent auditor would add to the quality of the audit by giving the auditors the opportunity to influence the selection of controls and the monitoring of them.

09/01/2005 17:12:34   Allowing more assistance from auditing firms would be great. It would ensure higher quality information for the investor in a more effective way. It would not harm the quality of the audit.

09/04/2005 07:42:16   Yes. smaller companies usually have less resources for standards implementation and hence both dates extensions and auditors help can help.

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