AeA Applauds Securities and Exchange Commission for Sarbanes-Oxley Section 404 Compliance Delay
Smaller companies will deservedly benefit from additional one-year filing delay

Washington – 9/22/2005 – AeA, the nation’s largest high-tech trade association, today applauded the Securities and Exchange Commission’s (SEC) decision to grant many smaller public companies an additional one-year extension to file Section 404 internal control reports as required by the Sarbanes-Oxley Act.

“The SEC’s decision to further delay the Section 404 filing date is very important to AeA’s member companies,” said William T. Archey, President and CEO of AeA. “This is a true indicator that the SEC has been receptive to input given by AeA, our member companies, and other groups, that the burden of Section 404 has disproportionately fallen on smaller corporations.

“As it stands now, a $10 million dollar company is treated the same as a $10 billion dollar company. While more still needs to be done to balance this burden, AeA is encouraged by yesterday’s announcement and the progress being made by the SEC’s Advisory Committee on Smaller Public Companies, which recommended the delay.”

In October, 2004, AeA established a National Sarbanes-Oxley Section 404 Committee, comprised of AeA member company CFOs and senior executives from its 18 councils throughout the United States. Over the past several months, members of this committee have held meetings with the SEC, the Public Company Accounting Oversight Board (PCAOB), and the Government Accountability Office (GAO). The Chairman of AeA’s Section 404 Committee also serves on the SEC’s Advisory Committee on Smaller Public Companies.

Earlier this year, AeA released its report titled Sarbanes-Oxley Section 404: The ‘Section’ of Unintended Consequences and its Impact on Small Business. While it is highly complementary of Sarbanes-Oxley and its effectiveness on corporate governance, the report is critical of Section 404 implementation, which requires extensive new internal controls for financial reporting. AeA states that Section 404 is having a devastating impact on small- and medium-sized companies and many of the objectives of the legislation’s authors will not be realized.

A copy of AeA’s report, Sarbanes-Oxley Section 404: The ‘Section’ of Unintended Consequences and its Impact on Small Business, can be viewed at http://www.aeanet.org/soxreport.

- ## -

About AeA
AeA, founded in 1943 by David Packard, is the largest nonprofit high-tech trade association in the United States with nearly 2,500 companies, representing all segments of the industry and 1.8 million employees. Currently, AeA has 18 offices in and around the United States, as well as offices abroad in Brussels and Beijing. Our primary purpose is helping our members’ top and bottom lines by providing the following services: Access to Investors; State, Federal & International Lobbying; Insurance Services; Government Procurement; Business Networking; Foreign Market Access; Select Business Services; and Executive Education.

This page was last updated on 09/22/05.