From: Sandy Hentges
Sent: March 29, 2006
Subject: File No. 265-23

The Austin Chamber joined Chambers from Boston, San Francisco and Raleigh calling for changes to the Sarbanes-Oxley Act (SOX) for small and mid-cap publicly traded companies. A study completed by Abt Associates, Inc. of Boston identified a number of areas of SOX that disproportionately imposes a significant burden on smaller publicly traded companies.

The report submitted to the Securities and Exchange Commission (SEC) acknowledges the positive effects of SOX, but cautions that it has unnecessarily hampered the growth of the nation’s innovation economy. The report outlines key recommendations for changes by the SEC that would reflect the intent of SOX – to prevent, detect, and punish corporate fraud – while removing unfair obstacles for companies that are climbing toward the goal of going public. The Greater Austin Chamber is concerned about the long-term impact of the law. The economic vitality of our communities and nation are tied to the sustainability of our small business. The Greater Austin Chamber strongly opposes the negative impact SOX could potentially impose on small businesses. Sabernes-Oxley is inadvertently jeopardizing the viability of those same businesses by imposing on the disproportionately large costs and putting them at a competitive disadvantage globally. In effort to avoid such consequences, the Greater Austin Chamber supports the following recommendations:

1. Establish small company criteria: The SEC should clearly define what constitutes a smaller public company—using market cap and revenue breakpoints that are well understood.
2. Revise compliance requirements: The SEC should address today’s overly burdensome compliance procedures—exempting smaller public companies from certain aspects of Section 404.
3. Provide guidance to small companies: The SEC should provide additional guidance to smaller public companies—outlining approaches and best practices for conducting a cost-effective self audit of internal controls.
4. Provide guidance to accounting industry: The Public Company Accounting Oversight Board (PCAOB) should provide continued guidance to the accounting industry—describing and ensuring a top-down and risk-based approach to outside audits of internal controls.
5. Streamline accounting industry standards: The SEC should work formally with the Financial Accounting Standards Board (FASB) and the PCAOB to develop streamlined accounting standards—reducing the complexities faced by smaller companies, while providing benefits to all.

We appreciate the efforts of the SEC in their current process to keep the legislation’s intent intact. Please feel free to contact me should you have any further questions regarding this matter.

Thank you,

Sandy Hentges
Vice President, Public Policy
Greater Austin Chamber of Commerce
210 Barton Springs Road, Ste 400
Austin, TX 78704
512-322-5638 ph
512-478-9615 fax