Nydia Velazquez, chair of the House Committee on Small Business, fired off a press release expressing her disappointment that the Securities and Exchange Commission missed her 20-day deadline to provide a cost estimate for compliance with the internal-control provision of the Sarbanes-Oxley Act.
Velazquez sent out her statement on Tuesday morning, one day after her deadline and just hours before all five SEC commissioners will testify in front of the House Committee on Financial Services for an unusual hearing put together by committee chairman Barney Frank. Velazquez, a Democrat from New York and a member of the committee, plans to ask SEC chairman Christopher Cox about why the commission did not respond to her request, she said.
“I will continue to push these agencies to produce these numbers and fully understand the effect that this will have on small companies,” Velazquez said in her press release.
Tuesday’s announcement was at least the third public push by Velazquez to get the SEC to explain how the internal-controls provision of Sarbox will affect small businesses, which have yet to comply with Section 404. Earlier this month, Velazquez and Steve Chabot, the ranking member of the small business committee, sent a letter to Cox asking him questions about the SEC’s methodology for estimating compliance costs by June 25. In addition, her committee held a hearing on June 5 with Cox to discuss these issues.
Velazquez gave the same deadline and made a similar request of the Public Company Accounting Oversight Board, which is overseen by the SEC. The PCAOB responded by June 25, but did not include a cost estimate, Velazquez said.
At the June 5 hearing with Velazquez’s committee, Cox declined to quantify the cost of compliance, but said the new auditing standard will bring the “unduly high costs of implementing Section 404” down. The SEC did not immediately return CFO.com’s request for comment for this story.
The SEC recently revised its management guidance and is closing in on approving the corresponding auditing guidance — primarily in an effort to make it more flexible for smaller companies — but so far as not caved to congressional pressure to extend the deadline for when companies with a market capitalization of less than $75 million have to provide an assessment and attestation of their internal controls in their annual financial statements.
Velazquez and Chabot’s counterparts in the Senate, John Kerry and Olympia Snowe, who head the Senate’s small-business committee, have also been pressuring the SEC to further delay when smaller companies have to comply.