By Jennifer A. Johnson
U.S. Ben Quayle, R-Ariz., introduced a bill that could make it easier for companies that choose to go public.
The bill allows new companies with a market capitalization less than $1 billion to opt out of regulations within section 404 of the Sarbanes-Oxley Act for the first ten years after going public.
One of the most contentious aspects of Sarbanes-Oxley is Section 404, which requires company management to report on the adequacy of the company's control of its financial reporting. The bill was enacted in 2002 in the wake of accounting scandals at companies including Enron and Tyco International.
Companies have long complained that the regulation is costly and difficult to implement.
"The Startup Expansion and Investment Act removes one of the many regulatory hurdles that inhibit many companies from going public," Quayle said. "Access to the public capital markets is vital for a company to expand and hire."
Quayle said the costs associated with section 404 compliance can discourage companies from going public. Currently, companies with a market capitalization less than $75 million do not have to comply with section 404.
Quayle is freshman Republican representing Paradise Valley, Anthem and Desert Ridge. He's the son of former vice president Dan Quayle.