Small companies pay disproportionately higher costs to comply with the Sarbanes-Oxley law, the Government Accountability Office said in a report that may help spur the Securities and Exchange Commission to ease auditing rules.
The report by the GAO, the independent investigative arm of Congress, was released Monday ahead of an SEC roundtable discussion Wednesday about the effects of the law on accounting and corporate governance. The SEC is reviewing options that may ease companies’ compliance costs.
The SEC should adopt “clear, unambiguous and practical small-business rules,” said Republican Sen. Olympia Snowe of Maine, one of two lawmakers who asked for the GAO study. Snowe chairs the Senate Small Business and Entrepreneurship Committee.
Business groups such as the U.S. Chamber of Commerce have made revising Sarbanes- Oxley a top lobbying priority, and a growing number of lawmakers are joining the cause. There have been two hearings on Capitol Hill since April 5 about the law’s costs and possible alternatives.
The GAO report said the costs may have driven some small public firms to go private.
