I got an e-mail from the AICPA's "Center for Audit Quality" on 16 June 2010, saying it opposes a permanent exemption for companies with market capitalizations under $75 million from compliance with SOX section 404. The Center opposes this to protect investors. Would an AICPA organ favor creating make-work projects for CPAs? No. The Center is the old AICPA SEC Practice Section in new garb. Consider how much the AICPA has improved audit quality since 1976. Not much. Here's a link to the letter sent Congress:
http://www.thecaq.org/publicpolicy/pdfs/CAQCIICFAInstitutelettertoConfereesRESOX404b61510.pdf. Don't laugh too hard in reading this.
3 comments:
If we added up the shareholder losses in Lehman and Bear how would it compare to the total losses of investors in public companies of less than $75 million (since the passage of SarBox)?
Audit quality? I'm thinking about AIG and Goldman on derivatives valuation pre-collapse... hahahahahaha!
Anonymous:
There are about 4,000 companies, each with less than $75 million market cap. Assuming they average $40 million, that's $160 billion market cap. Assuming the public even lost 10%, a very high assumption, of its value in these microcaps from fraud, that's $16 billion. Peanuts. The public lost $65 billion in the Madoff scam, $7 billion in the Stanford fiasco, the AIG bailout took $182 billion, Bear's bailout was $29 billion, Freddie & Fannie will need $400 billion, Citigroup needed ...
IA
Thanks for quantifying my thesis IA!
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