H.R. 1780, The Small Business Securities Protection Act

• This item is from the 110th Congress (2007-2008) and is no longer current. Comments, voting, and wiki editing have been disabled, and the cost/savings estimate has been frozen.

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H.R. 1780 would improve the implementation of section 404 of the Sarbanes-Oxley Act of 2002.

Detailed Summary

Small Business Securities Protection Act - Amends the Sarbanes-Oxley Act of 2002 to instruct the Securities and Exchange Commission to prescribe rules that incorporate risk-based concepts in evaluating internal control over financial reporting for issuers.

Requires such rules also to incorporate: (1) specific guidelines for measuring the terms "material," "reasonable," "significant," and "sufficient" in the context of internal control over financial reporting; (2) a requirement that the Public Company Accounting Oversight Board consider the efficiency of audit practices in its inspections; (3) alternative requirements for smaller issuers that reflect the relative size and complexity of smaller issuers, and the relative financial and manpower burdens placed on them in testing and documenting internal controls; and (4) revised standards for independence by auditors to permit the rendering of internal control advice for resolution of internal control issues and related liability safe harbors for auditors providing such advice to smaller issuers.

Status of the Legislation

Latest Major Action: 3/29/2007: Referred to House committee. Status: Referred to the House Committee on Financial Services.

Points in Favor

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Points Against

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