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

Washington – (3/3/2005) – AeA, the nation’s largest high-tech trade association, today applauded the Securities and Exchange Commission (SEC) for granting a one-year extension for some smaller companies to file Section 404 internal control reports as required by the Sarbanes-Oxley Act.

“The SEC’s announcement to 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 pleased with the SEC’s decision to delay filing requirements for these smaller companies.”

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

On February 10, 2005, 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.

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About AeA
AeA, founded in 1943, is a nationwide trade association that represents all segments of the technology industry and is dedicated solely to helping our members’ top line and bottom line. We do this in partnership with our small, medium, and large member companies by lobbying governments at the state, federal, and international levels, providing access to capital and business opportunities, and offering select business services and networking programs.  For more information, please visit http://www.aeanet.org.

This page was last updated on 03/03/05.