Mike Feldman Quoted in SHRM Online
“SOX Audits of Small Companies’ Internal Controls Delayed”

Mike Feldman was quoted in the article, “SOX Audits of Small Companies’ Internal Controls Delayed,” published February 14, 2008 by Society for Human Resource Management Online. The article reports on the U. S. Securities and Exchange Commission’s (SEC) decision to delay the application of section 404(b) of the Sarbanes-Oxley Act (SOX) to small companies until 2009.

Mike notes that small businesses urged the SEC to delay implementation of Section 404(b)’s “auditor attestation requirement” for small businesses because of the high costs they have witnessed large companies confronting in order to comply with the requirement. Mike states that SOX Section 404(b) has resulted in “an increase in the number of small companies that have been selling out instead of going public, or instead going public in London.” He adds that large corporations have added more internal auditors since SOX was enacted so that they could “try to get the company fixed before an outside auditor comes in,” whereas small companies usually don’t have as many staff members for internal audits. He notes that it can also be more difficult for small companies to segregate employees’ duties as an internal control because employees at small businesses often wear many hats.