Hearing of the Capital Markets and Government Sponsored Enterprises Subcommittee of the House Financial Service Committee - Small Company Job Growth and Regulatory Relief Act

Statement

Today, U.S. Representative Stephen Fincher (R-Frog Jump), introduced a discussion draft during the Financial Service Committee's Capital Markets and Government Sponsored Enterprises Subcommittee hearing. The Small Company Job Growth and Regulatory Relief Act would expand the exemptions available to small companies from certain costly reporting requirements of the Sarbanes-Oxley Act. Upon introducing the draft, Congressman Fincher delivered the following remarks:

"Thank you Chairman Garrett for the time and the opportunity to join this subcommittee hearing today. As you know, I have submitted a discussion draft to expand Sarbanes-Oxley 404(b) exemptions for small and mid-size companies with a market capitalization of less than $500 million.

"Supporters of increasing the $75 million cap believe that duplicative audit requirements hinder many companies from going public. Going public provides opportunities for companies to raise desperately needed capital in order to expand, reinvest, and create jobs. Opponents argue that changing the auditing requirements would lead to corporate fraud and shift us back to the days of Enron and World Com. I believe we can have our cake and eat it too on this issue.

"Let me be clear, I'm not talking about doing away with corporate audits or internal controls; just auditing of the internal controls of companies that could use their scarce resources to expand their business.

"By raising the limit on market capitalization, we help small and midsize companies create jobs, but also preserve the goal of Sarbanes-Oxley, which is to ensure that large and complex companies, which brought us Sarbanes-Oxley in the first place, continue to be subject to these additional audits. I look forward to the testimony and discussion today.

"Thank you and I yield back."

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