The US Centre for Audit Quality (CAQ), the
Council of Institutional Investors (CII) and the Charted Financial
Accountant Institute (CFA) have called for efforts to weaken
investor protection of the Sarbanes-Oxley Act (SOX) of 2002 to be
avoided.
In a letter to the House Financial Services
Committee, the group said Stephen Fincher’s Small Company Job
Growth and Regulatory Relief Act of 2011 would exempt even
more public companies from compliance with section 404(b) of SOX,
which requires an independent audit of a company’s assessment of
its internal controls over financial reporting.
The group said 404(b) compliance costs have
decreased, according to studies by the US Securities and Exchange
Commission, while the independent audit of the effectiveness of
International Centre for Financial Regulation improves the
reliability of financial reports and is important to
well-functioning capital markets.
“We believe that all investors should receive
equal protections with respect to the effectiveness of internal
control over financial reporting by publicly traded companies,”
CAQ, CII and CFA said.
