The Small Business Sarbanes-Oxley Assistance Act of 2006, introduced by Senator Kerry, would authorize the U.S. Small Business Administration to award federal grants to small businesses to help lessen the burden of the cost of complying with Sarbanes-Oxley regulations. It also creates a task force, assembled by the SBA Chief Counsel for Advocacy, and comprising of representatives from the U.S. Securities and Exchange Commission (SEC) and others, to report semi-annually on how to reduce the regulatory burden and assist small public companies complying with Sarbanes-Oxley.

“To help our economy grow, we need to help small businesses comply with the Sarbanes-Oxley regulations by reducing their regulatory burden where possible and providing federal assistance to those who need additional help. Congress passed a law to create accountability and transparency in the corporate structure, and it’s worked,” Senator Kerry said. “But too many small companies don’t have the resources or the expertise to do this on their own. This bill will help small businesses abide by the law and continue to focus on creating jobs and growing our economy.”

Senator Kerry’s bill follows a recent U.S. Government Accountability Office (GAO) report that found small public companies to be spending considerably more on implementing Sarbanes-Oxley, particularly Section 404 of the bill, which requires firms to establish internal control frameworks and to file internal control reports. The report found that firms with less than $75 million in market capitalization were spending $1.14 in audit fees per $100 of revenue, compared to just $.13 per $100 for firms with greater than $1 billion in market capitalization.

“The task force will make it easier for small businesses to comply with the Sarbanes-Oxley by reducing their regulatory burden in the future.” Senator Kerry said. “In the meantime, if Congress is asking these small firms to take on the costly burden of complying with Sarbanes-Oxley, the least we can do is chip in and help pay for it.”

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