US official sees Sarbanes-Oxley standoff resolved
NEW YORK, April 26 (Reuters) - A standoff over Sarbanes-Oxley corporate governance laws could be resolved amicably, a senior Treasury official said on Thursday.
"Our view is that this is all solvable. It does not require legislation to solve. The right people are working on these issues now," Treasury Under Secretary for Domestic Finance Robert Steel told a conference on capital markets.
The U.S. Senate on Tuesday defeated a Republican attempt to weaken those laws by making it optional for many corporations to comply with a controversial section on internal controls.
By a vote of 62-35, the Senate set aside an amendment to make compliance with Sarbanes-Oxley's Section 404 optional for companies with total market value of less than $700 million.
Business interests have attacked Sarbanes-Oxley's Section 404 as too costly and invasive almost since it was adopted in the landmark corporate governance and accounting reforms that followed a wave of book-cooking scandals beginning with the 2001 collapse of former energy trader Enron Corp.
Section 404 requires publicly traded corporations to disclose more about their internal financial controls, or how they keep their books in order. It also requires a company's outside auditor to give a public assessment of the controls.
The law was meant to reduce failures seen frequently during the Enron-era scandals on the part of auditors, executives and directors who neglected to keep an eye on internal controls.
Supporters of the law say it has helped reduce corporate fraud. But there is also wide agreement that implementing Section 404 has been too costly and complex. The Securities and Exchange Commission and the Public Company Accounting Oversight Board are working on changes to the law.
