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Delays Did Nothing to Help Small Cos. Cope With SOX

Tammy Whitehouse | September 11, 2008

Numerous delays extended to smaller companies in the requirement to report on the effectiveness of internal control did nothing to improve their chances for success.

That’s the conclusion of a recent Lord & Benoit report examining the first go-round of internal control reports for more than 3,300 smaller, non-accelerated filers. The firm found evidence that 34 percent of the smaller companies, representing a combined market capitalization of $50 billion, did little or nothing to prepare for their first filing under Sarbanes-Oxley Section 404(a).

According to the report, 7 percent did nothing whatsoever, including not filing a report, while another 12 percent said simply they had inadequate segregation of duties and went no further to comply. The report also said that 88 percent of the 575 non-accelerated filers who reported material weakness said in their...

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