Sarb-Ox revisited again
TEXT OF STORYLISA NAPOLI: Later today at the SEC, a meeting to discuss whether Sarbanes-Oxley accounting rules should be relaxed for the smallest publicly-traded companies. Those companies spend up to 1 percent of their earnings complying with those regulations. Marketplace’s Steve Henn says many are begging for some relief.
STEVE HENN: Joseph Piche is the CEO of Eikos. It’s a small nanotech company based in Franklin, Mass.
Piche’s business needs capital, but if he decides to take his company public, he’ll be heading overseas to London’s stock exchange.
JOSEPH PICHE: There are law firms in Washington that have groups that specialize in helping small companies to do just that.
Why? Because he wouldn’t have to obey those onerous Sarbanes-Oxley accounting rules. That’s one reason many argue that small businesses should be exempt from parts of that law.
But Eric Talley, a law professor at UC Berkeley, argues a small business exception’s a bad idea.
ERIC TALLEY: Companies may manipulate their own practices a little bit more than they would have.
If companies worth less than, say, $75 million don’t have to abide by the same rules as everyone else, Talley worries many small firms would massage their books to appear even smaller.
And the last thing anyone wants is rules that encourage accountants to get creative.
In Los Angeles, I’m Steve Henn for Marketplace.
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