It's Time to Reform Sarbanes-Oxley
Time to Reform Sarbanes-Oxley
Washington – The Club for Growth urges all members of Congress to put politics aside for the sake of America’s small businesses and vote for Senator Jim DeMint’s (R-SC) amendment giving small public companies the option of opting out of the most onerous regulations of Sarbanes-Oxley.
Passed in 2001 as an overreaction to corporate scandals, Sarbanes-Oxley extracts an unduly high toll on America’s vital small businesses. According to a recent GAO study, the cost of complying with Sarbanes-Oxley for small public companies is disproportionately higher than for larger companies. Because of this unfair disadvantage, many small companies are opting to remain private, limiting their access to capital and their ability to grow.
Senator DeMint’s amendment will allow companies to opt out of Section 404—requiring an internal and external audit—if they meet one of the following three conditions: market capitalization of less than $700 million; revenue of less than $125 million; or fewer than 1,500 shareholders.
“While concerns about corporate malfeasance were legitimate, Sarbanes-Oxley has become the poster child for punishing the many because of the sins of the few,” Club for Growth President Pat Toomey said. “And for small businesses, the punishment is particularly harsh, making it nearly impossible for them to compete on a level playing field.”
“America’s small companies are a celebration of the country’s entrepreneurial spirit and an integral part of the country’s economic vitality,” Mr. Toomey continued. “Already, reform of Sarbanes-Oxley has garnered bipartisan support. It is time for Republicans and Democrats to unite to protect small businesses.”
