SEC Issues New Section 404 Guidance

Law360, New York (May 24, 2007, 12:00 AM EDT) -- The U.S. Securities and Exchange Commission has issued new interpretive guidance for Section 404 of the Sarbanes-Oxley Act designed to help companies strengthen internal controls and lower compliance costs.

The new guidelines, issued Wednesday, aim to “reduce uncertainty about what constitutes a reasonable approach to management’s evaluation while maintaining flexibility for companies that have already developed their own assessment procedures,” said John W. White, director of the SEC’s Division of Corporation Finance.

According to the amended rules, if a company performs an evaluation that complies with...
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