US regulators consider Sarbanes-Oxley law changes

13 November 2006

US financial regulators have met to discuss relaxing the rules on the auditing of internal financial controls at publicly-listed companies.

The chairman of the Securities and Exchange Commission, Christopher Cox, met with Mark Olson of the Public Company Accounting Oversight Board (PCAOB) to discuss changes to the Sarbanes-Oxley laws, introduced following the Enron scandal.

Many on Wall Street have criticized the laws because they demand that companies document the internal counter-fraud measures they have in place, and then have them double-checked by external auditors.

This has made internal auditing an increasingly expensive business for many publicly-listed companies - in particular smaller enterprises.

The meeting between the SEC chairman and PCAOB follows Mr Cox's letter to the board urging changes to the way that the legislation was currently being interpreted.

However, the regulators are not believed to be considering scrapping the part of the legislation in question, but rather changing it in order to alter its treatment of smaller companies.

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