February 23, 2005
I am working with a small public company on their SOX 404 compliance. The company has a July 31 year end, meaning that, as things stand now, they will have to comply effective with their 2005 year end. Since the roundtable will not be held until April, and any new guidelines, etc., probably not available until well after the roundtable, this would seem to put the company in a difficult situation. That is, they are currently incurring significant expenses in working to comply with the rules as now in place, and those rules could change after the company is finished with their compliance effort and the new rules could reduce the cost and effort currently required to comply.
In your press release earlier this month, you mentioned a possible delay in the implementation requirement for smaller public companies while the matter was being studied, including the proposed roundtable. Where does the staff stand on such a delay? When will we know whether or not there is going to be a delay? For the reasons stated in the preceeding paragraph, a delay would seem to be the fair way to handle the situation for smaller public companies who can ill afford to spend time and money on compliance with rules that could very well change once comments are in and discussions are held. This is particularly true of registrants with July, August or September year ends who have to have their effort completed as the guidelines are being considered.
I realize that this is probably not the proper forum to raise this issue, but I dont have any other way to contact the Commission with my concern. In any event, I am hopeful that the issue I raised will be considered and resolved sooner rather than later. The clock is ticking and significant costs are being incurred.