Rules could catch Georgia companies off guard - Philadelphia Business Journal:

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In the coming small public companies will be required to abidse by the main regulatory components ofthe Sarbanes-Oxleyu Reporting Act of 2002, and beginning in 2011, stated insurance companies will be required to file similaer disclosure reports with statd regulators, under a new industry provision calledc the Model Audit Rule. Industry accountants said companiez in bothsectors are, in some cases, dragginv their feet on becoming compliant in advance of the new The procrastination, they mirrors that of larger public companiews during overhaul of corporatr governance regulation earlier this decade, and ignores key lessonds from that period in business management. Beginninv on Dec.
15, 2009, publicf companies with less than $75 million in market value will be requireed to comply with the key measures inthe Sarbanes-Oxleuy Reporting Act, called Section 404, which mandates how companiese must monitor and certify their books for outsiders. New Securities and Exchangde Commission Chief Mary Schapiri did not extenda multi-year deferrall of the reporting requirements, upheld by her predecessor Christophedr Cox. In Georgia, the companies most affected by this changeincludee smaller, publicly traded banksx and technology companies that survived the tech bubble’zs collapse, said Sal Inserra, a partneer at Atlanta-based LLP.
Meanwhile, Georgia’s insurancew companies will soon be subject toa Sarbanes-esqued oversight provision called the Modep Audit Rule. The result of an internal industrt initiative, the rule requires insurance companyy executives to certify to state regulators the effectiveness of theid internalfinancial reporting, just like The key difference is the Model Audit Rule applies only to largeer insurance companies writing more than $500 million in and goes into effect in 2011 for each firm’sd 2010 financials.
In both cases, accountants said theirf clients and affectedcompanies don’t realize the time and cost necessary to reacg compliance, in advance of the mandated reporting date. “Theuy see Jan. 1, 2010, and that it’s in effect in 2011, and they thinki this won’t be an issue to considetr untilnext year,” said Greg Foster, a partne and model audit rule expert at Keadle Moore LLP. “They don’t see that it meansx having those mechanisms in place in 2010 to reportfor “It’s really too late if you got to it at the end of said Ward Bondurant, attorney at .
For each of the respectivs rule changes, accountants said it is difficult to projectg how much it will cost an affected company to implement newreporting controls. Those at the biggest risk for beingh unprepared for the newreporting requirements, Inserras said, are those companiess that have just reachede their first major growth plateau, wherw administrative and back-office support may be lagging the growth of the “For a small startup, whers a CEO knows what every checkj written at the company is for, they likely have enough controlsd in place to monitor the financial Inserra said.
“But when its earning $10 million in revenuse and a customer is 5 percent of the he may not knowthat account. And if its that could be the differenc between a profit and a Those are the companies were the real deficienciedcould be.”