AeA's SOX Report || Recent News on SOX II AeA Contact Information II Resources

April 4, 2007

FROM THE SEC WEBSITE:  The SEC's Commissioners today endorsed the recommendations of the agency's professional staff to eliminate waste and duplication in the Sarbanes-Oxley compliance exercise, in a move that will particularly benefit smaller companies. The Commissioners urged the SEC staff to continue to work closely with the Public Company Accounting Oversight Board (PCAOB) to make the internal controls provisions of Section 404 of the Sarbanes-Oxley Act of 2002 more efficient and cost effective...read more.

March 12, 2007

The U.S. House Small Business Committee Chairwoman Nydia M. Velázquez and Ranking Member Steve Chabot today asked the chairmen of the Securities and Exchange Commission and the Public Company Accounting Oversight Board to delay the SEC's new regulatory guidance on the implementation of Section 404 of Sarbanes Oxley Act of 2002 for small companies. The letter requests that the deadline be postponed in order to allow sufficient time to determine whether or not the proposed standards will reduce burdensome compliance costs for small firms...read more.

February 7, 2007

William T. Archey, President & CEO, AeA testifies to the U.S. House of Representatives Committee on Small Business.  In his testimony, Mr. Archey discusses how SOX has disproportionately affected small businesses.

William T. Archey, President & CEO, AeA testifying (left).

January 2, 2007

AeA releases a new special report, "The New Congerss & High Tech," which includes a section on SOX 404 in the 110^th U.S. Congress...read more.

November 7, 2006

SEC Commissioner Paul S. Atkins speaks at the AeA Classic Financial Conference in Monterey, CA, in front of nearly 600 investors and 152 AeA high-tech public member companies that presented at the conference.  Commissioner Atkins says that AeA has been, "an active participant" in the SOX debate and credited AeA, "for not always sugar-coating its views."  Additionally, he commented on the proposed changes to AS2 and regulation relief to small sized companies.  The Commissioner's full remarks can be read on the SEC website.

SEC Commissioner Paul S. Atkins speaking at the AeA Classic Financial Conference

February 26, 2007

September 18, 2006

AeA response to the SEC's Concept Release seeking public comment regarding internal control over financial reporting...read more.

June 20, 2006

AeA SOX time line of events...read more.

April 3, 2006

AeA Comments on SEC's Advisory Committee on Smaller Public Companies' recommendations to provide smaller companies with Section 404 relief...read more.

March 14, 2006

Spitzer says Sarbanes-Oxley rules go too far...read more.

March 8, 2006

AeA Executives Lobby on SOX 404

Members of the AeA Sarbanes-Oxley Section 404 Working Group flew to Washington, DC, for meetings with members of the U.S. Congress and their staff; the Securities and Exchange Commission (SEC); and the Public Company Accounting Oversight Board (PCAOB)...read more.

February 16, 2006

Draft Final Report/Recommendations of the SEC Advisory Committee on Smaller Public Companies

The Advisory Committee will be considering this report at its meeting on February 21, 2006.  The summary of the recommendations on internal controls begins on page 38.  Download the report.

October 5, 2005

AeA and NASDAQ Release Survey Results on SOX 404

A survey conducted by The Nasdaq Stock Market, Inc. (NASDAQ:NDAQ) and the American Electronics Association (AeA) has found that public companies anticipate slight cost reductions during the second year of implementing the governance and financial reporting practices required by the Sarbanes-Oxley Act (SOX)...read more.

Download the Report

NASDAQ and AeA Sarbanes-Oxley Act Cost and Compliance Survey

September 22, 2005

AeA Applauds Securities and Exchange Commission for Sarbanes-Oxley Section 404 Compliance Delay

Smaller companies will deservedly benefit from additional one-year filing delay...read more.

June 2, 2005

AeA applauds the nomination of Rep. Chris Cox (R-CA) as Chairman of the SEC

AeA applauds the President for his nomination of Rep. Chris Cox as Chairman of the Securities and Exchange Commission.  For the last 17 years, Congressman Cox has effectively represented the 48^th District of California, home to many high-tech companies, and he is very knowledgeable of the issues that are important to AeA and our member companies...read more.

May 16, 2005

PCAOB Adopts Key AeA Sarbanes-Oxley Section 404 Implementation Recommendations

AeA and its member companies are pleased the PCAOB today released guidance on Sarbanes-Oxley Section 404.  This guidance specifically addresses many of the problems with implementation raised by AeA in its February 10, 2005 report and during its meetings with the PCAOB over the past several months.  We are optimistic this guidance will provide our member companies with much needed relief, however, its true effectiveness will greatly depend on actions by the auditors.

Read AeA's Press Release
Read the Wall Street Journal Article (A WSJ.com password is required)

March 30, 2005

AeA submits comments to the Securities and Exchange Commission in anticipation of its April 13 Roundtable on internal controls. Click here to review the comments.

March 7, 2005

AeA SOX 404 Chairman named to SEC Advisory Committee on Small Public Companies

SEC Chairman William H. Donaldson announced the appointment of 19 additional members of the SEC Advisory Committee on Smaller Public Companies, including Alex Davern, CFO of National Instruments and Chairman of the AeA Sarbanes-Oxley Section 404 Committee...read more.

March 3, 2005

SEC delays SOX 404 compliance for some small businesses for one year

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

AeA Member Company Reaction:
"I want to extend my personal thank you to the entire AeA organization for the diligence and commitment that was exhibited in getting the SOX 404 rule postponed for small business filers. This news will positively impact our profitability this year, and for that we and our shareholders are grateful. Thank You AeA!"

Janet M. Biski, Chief Financial Officer
SRS Labs, Inc.
Santa Ana, CA 

March 2, 2005

Wall Street Journal front page article on SOX 404

Alex Davern, CFO, National Instruments Corp. and Chairman of AeA's SOX 404 committee was quoted in a front page article in the Wall Street Journal on Sarbanes-Oxley Section 404.  Read the article on WSJ.com (password required) or read one of the reprinted articles in the Pittsburgh Post Gazette.

March 1, 2005

AeA SOX Committee invades DC to ask for SOX relief

Executive Summary: The March 1 Lobby Day that the AeA SOX Committee spent in Washington was the perfect example of the kind of effect executive involvement can have on critical public policy issues. The face-to-face interaction was significantly more powerful than just written words in conveying the overall impact that SOX 404 is having on small and mid-sized companies.

Key regulatory players saw the honest emotion and commitment from our executives as they explained the unreasonable burden that these regulations forced on smaller companies. Job creation is being delayed, shareholder value is being lost, and competitiveness is being weakened. This was the consistent and credible message that each executive on the SOX team communicated. And it was clear to AeA staff that the government audiences listened and listened hard

Read the full report on AeA's meetings with Senator Paul S. Sarbanes' office (D-MD), the Government Accountability Office (GAO), and the Public Company Accountability Office (PCAOB).

February 10, 2005

AeA releases its report, "Sarbanes-Oxley Section 404: The 'Section' of Unintended Consequences and its Impact on Small Business." Alex Davern, AeA's SOX 404 Committee Chair and CFO of National Instruments and William T. Archey, President and CEO, AeA, hold a press conference in AeA's David Packard Conferencing Center in Washington, DC.

Download the Report

Read the Press Release

January 6, 2005

AeA member companies fly to Washington for SOX 404 Meetings with SEC Chief Accountant

On January, 6, 2005, the national AeA Sarbanes-Oxley Section 404 Committee met with the Securities and Exchange Commission's Chief Accountant, Donald T. Nicolaisen, and his senior advisors. The meeting took place in the David Packard Conference Center at AeA's Washington, D.C. office, where ten member company executives and AeA staff discussed the impact Section 404 of Sarbanes-Oxley (SOX) is having on small and mid-sized companies.

To read the full recap visit:  www.aeanet.org/SECSOX404

William T. Archey, AeA President & CEO, Donald T. Nicolaisen, SEC Chief Accountant, and Alex Davern, AeA's SOX 404 Committee Chair and CFO of National Instruments Corp. (Left to Right)

January 3, 2005

The Washington Post starts the new year by highlighting SOX and the AeA initiative by a front page story

• Washington Post Article - 1/3/05
  Trade Groups, Firms Push to Ease Tough Federal Scrutiny

  Two-and-a-half years after Congress passed the most sweeping corporate reforms since the Great Depression, trade groups are maneuvering to revise them, arguing that they are too expensive, too time-consuming and too much trouble for small businesses.

  In recent weeks industry coalitions including the trade group AeA, formerly known as the American Electronics Association, and the American Bankers Association have asked their members to gather complaints about costly provisions that require them to tune-up their financial systems to help uncover fraud and mistakes. The effort is part of a broader campaign planned for this year to modify the Sarbanes-Oxley Act, passed after financial blowups at Enron Corp. and WorldCom Inc. cost investors billions of dollars and exposed serious lapses in the way companies are governed.

December 17, 2004

SEC Chairman William H. Donaldson announces establishment of advisory committee to examine impact of Sarbanes-Oxley act on smaller public companies

• Securities and Exchange Commission Press Release - 12/16/04
  SEC ESTABLISHES ADVISORY COMMITTEE TO EXAMINE IMPACT OF SARBANES-OXLEY ACT ON SMALLER PUBLIC COMPANIES
  
  Alan L. Beller, Director of the SEC's Division of Corporation Finance, applauded the decision to establish the advisory committee. Beller stated, "Ensuring that the benefits of securities regulation of smaller public companies outweigh the costs is important to the health of our economy and the role that these companies play in job creation and full employment."
  
  
• AeA Press Release - 12/17/04
  AeA Responds to SEC Action on Sarbanes-Oxley
  
  "This is the kind of leadership we need from the Securities and Exchange Commission (SEC). We are pleased the SEC is examining the impact that Sarbanes-Oxley Section 404 is having on smaller companies. Establishing an advisory committee is an appropriate and necessary action to examine the disproportionate burden Sarbanes-Oxley has placed on these companies," said John Palafoutas, AeA Sr. VP of Domestic Policy and Congressional Affairs.

December 1, 2004

SEC Delays implementation for some companies

• Securities and Exchange Commission Press Release - 11/31/04
  SEC Postpones Filing Date for Internal Control Reports for Some Accelerated Filers
  
  Don Nicolaisen, the Commission’s Chief Accountant, said, “The Commission is sensitive to resource constraints at accounting firms and at smaller public companies, and is taking this step to facilitate the successful and effective implementation of the Section 404 internal control requirements.”
  
  
• AeA Press Release - 11/31/04
  AeA Applauds Securities and Exchange Commission for Sarbanes-Oxley Compliance Delay: Smaller companies will deservedly benefit from 45 day filing delay
  
  “After months of input from small and medium sized companies, the SEC has recognized that the burden of Section 404 of Sarbanes-Oxley has disproportionately fallen on smaller corporations,” said William T. Archey, President and CEO of AeA.  “Public companies with a market capitalization between $75 million and $700 million will benefit from the delay.  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 pleased with the SEC’s decision to delay filing requirements for smaller companies.”
  
  
• Washington Post Article - 12/1/04
  "SEC Delays Reviews for Some Firms: Companies Must Audit Financial Controls"
  
  "I've never seen any other issue that has put small and medium-size companies' hair on fire like this," said John P. Palafoutas, senior vice president of domestic policy of AeA, a trade association for technology firms.

November 19, 2004

AeA Mounts Effort to Modify Sarbanes-Oxley Section 404

A number of our small and medium size companies, sometimes known as small and medium enterprises (SMEs), have come to us with serious concerns about Sarbanes-Oxley (SOX), specifically Section 404. They have asked for a grassroots effort to modify Section 404 of SOX. We have agreed to do that.

All 17 local Councils of the AeA grassroots network will have established by mid-November an ad hoc SOX committee. Each committee will consist of local executives primarily from SMEs to come up with a paper describing the following:

• What is good about SOX and how has it improved corporate governance?
• What are the specific problems with Section 404 and especially the problems for SMEs?
• Provide 10 recommendations for modifying SOX and provide the rationale for each recommendation.

Each of the ad hoc committees is being asked to select one person to serve on a national steering committee on SOX. The national committee will have several roles. Those are:

• Finalize the white paper with the recommendations and positive comments about SOX.
• In conjunction with the AeA staff, define a strategy for lobbying the proposed changes first with Congressional staff, then Congressional members themselves, and finally key officials of the Securities and Exchange Commission (SEC). (In early November several members of the AeA Board met with SEC Chief Accountant Donald T. Nicolaisen to express their SOX concerns.)
• Develop a PR strategy for getting the word out on the significant negative impact that Section 404 is having on SMEs and the fact that some of the objectives of Section 404, as intended by Congress, are not being achieved.

Again, our effort will have positive impact only if small and medium size companies really get involved. Should you want to, please contact your local AeA Council representative or log on to www.aeanet.org/sox to get further information about this extremely important initiative.

Sincerely,

William T. Archey (bio)
AeA President and CEO 

For more information on Sarbanes-Oxley Contact:

• Marie Lee
  Director and Counsel, Finance and Tax Policy
  202.682.4448
  
  
• John Palafoutas
  Senior VP, Domestic Policy
  202.682.4451

Legislation

• Sarbanes-Oxley Act of 2002
• Summary of Sarbanes-Oxley Act of 2002
  The American Institute of Certified Public Accountants (AICPA)

Articles

• "SEC Backs Eased Rules:  Sarbanes-Oxley Changes to be in Place by June"
  AP, April 5, 2006
• "Spitzer says Sarbanes-Oxley rules go too far"
  Reuters, March 14, 2006
• "Sarbanes-Oxley:  A Price Worth Paying?"
  The Economist, May 19, 2005
• "Auditors Get Sarbanes-Oxley Rebuke"
  Wall Street Journal, May 17, 2005
  (A WSJ.com password is required)
• "New accounting rules raise price of audits"
  USA Today, April 12, 2005
• "Smaller than a SARBOX?"
  CFO Magazine, March 24, 2005
• "Costs of Sarbanes-Oxley Are Out of Control"
  Wall Street Journal, March 21, 2005
  (A WSJ.com password is required)
• "Section 404: The bane of small public companies"
  Silicon Valley/San Jose Business Journal, March 14, 2005
• "Accounting Rule Exposes Problems But Draws Complaints About Costs" 
  Wall Street Journal, March 2, 2005 
  (A WSJ.com password is required)
• "Corporate Reforms Irk Small Business - A provision that makes compliance costly is weakening support for Sarbanes-Oxley"
  Los Angeles Times, January 16, 2005
• "Trade Groups, Firms Push to Ease Tough Federal Scrutiny"
  Washington Post, January 3, 2005
• "Tech companies struggle with Sarbanes-Oxley"
  USA Today, December 8, 2004
• "SEC Delays Reviews for Some Firms - Companies Must Audit Financial Controls"
  Washington Post, December 1, 2004 
• "Sarbanes-Oxley is goring business"
  Mercury News, October 3, 2004
• "Hardly Ready for Sarbanes-Oxley"
  BusinessWeek Online, September 20, 2004

Links

• U.S. Securities & Exchange Commission (SEC)
• Public Company Accounting Oversight Board (PCAOB)
• First Gov (The U.S. Government's Official Web Portal)
• U.S. House of Representatives
• U.S. Senate

This page was last updated on 04/06/07.  
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