Resources for Sarbanes-Oxley (SOX)

Accounting Standard 5: A Kinder, Gentler Compliance Standard

www.metrocorpcounsel.com

The SEC amended the compliance date for non-accelerated filers so that the first time that they need to prepare management's assessment of the effectiveness of their company's internal control over financial reporting will be for fiscal years ending on or after 12/15/2007. In the following year, these same companies will be subject to the Auditors Attestation over their Sarbanes-Oxley reporting requirements.

By now, all non-accelerated filers should have at least started discussions with their external auditors as to their plans for SOX compliance, making sure they understand their auditor's expectations for design of controls as soon as possible. Also, it is important that management enable their auditors to understand and get comfortable with their internal control for financial reporting. In the spirit of Accounting Standard 5 (AS 5), the external auditors will be able to leverage management's testing where feasible, thereby lowering the time and effort required for the external audit.

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