Securities and Exchange Commission Chairman William H. Donaldson said yesterday that his organization might modify a controversial Sarbanes-Oxley rule that compels companies to disclose internal financial controls.
"I would be very disappointed if we didn't find some things we could do," Donaldson told reporters from Reuters news service.
Donaldson's remarks came after a crowded roundtable hearing in Washington, where leaders in business and industry repeatedly lamented that the rule, known as Section 404, has been costly and time-consuming. They said it causes unnecessary administrative duplication and tries the nerves of auditors, directors and managers alike, Reuters reported.
"We've certainly seen benefits from 4041/4 But the costs exceeded the benefits" in some areas, said Lisa Flavin, vice president-audit at Emerson Electric and a member of the roundtable panel.
Public Oversight Board Chairman William McDonough, whose board was created by Sarbanes-Oxley to oversee corporate auditors reiterated Donaldson's sentiments.
"The American people have been saying  is a very good idea, but it costs too much. We have to be attentive to that."
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.