Small businesses have long complained that the cost of Sarbanes-Oxley compliance is too high, and the Securities and Exchange Commission seems to have gotten the message.
SEC Chairman Christopher Cox and the agency's other four commissioners tentatively adopted revisions to the antifraud law Wednesday that would allow smaller companies to "scale and tailor" their compliance procedures.
The proposed changes would also reduce requirements for testing internal controls and providing documentation for companies with market values ranging from $75 million to $700 million, according to The Associated Press.
In a statement, the SEC said smaller companies deserve more flexibility because their operations are typically not as massive and complex as larger enterprises.
Smaller companies have been most vocal about the crushing cost of complying with Section 404 of Sarbanes-Oxley, which requires businesses to file reports detailing the strength of internal financial controls and noting any problems that have been fixed.