So how many of you are surprised that the Securities and Exchange Commission is looking to possibly withdraw the Section 404 requirements of Sarbanes-Oxley for small businesses? It seems to be one of those controversies that won't go away.

We learned that an advisory panel is expected tomorrow to urge the SEC to eliminate Section 404 compliance for smaller companies. The agency has twice extended the SOX compliance deadline for small cap companies. The most recent extension granted a reprieve until July 2007.

Now, it appears the SEC will hear advice to make smaller companies permanently exempt, and hold yet another public discussion on the reporting and auditing requirements of SOX on May 10.

The business community at large appears to be split on whether small cap filers deserve such a break. In a recent Compliance Pipeline poll, 49 percent of the respondents felt the move to push back the deadline for smaller companies was the correct move. Another 40 percent didn't think the break was fair, and 11 percent were still unsure.

I wonder if those opinions will change when they learn that the SEC's Advisory Committee on Smaller Public Companies is also looking to redefine what constitutes a smaller company. The recent filing delays were granted to companies with market caps of $75 million and under, but the advisory committee is now defining smaller public companies as those with market caps under $787 million.

In the draft recommendation, to be presented tomorrow, the committee also defines companies with market capitalization under $128 million as "micro-cap companies," and those with market caps between $128 million and $787 million as "small-cap companies."

I'm not sure what the distinction is because the SEC advisory committee is urging that only those micro-cap companies with annual revenues of less than $125 million or small-cap companies with less than $10 million in annual revenue be completely exempt from Section 404 requirements.

So it sounds like it could get a little complicated with various breaks depending on revenue and market capitalization, all the way to complete exemption for some companies.

This is sure to elicit applause and jeers and in preparation for the May 10 roundtable to discuss year-two SOX concerns, the commission is soliciting written feedback from registrants, auditors, investors and others on their experiences with complying with the Section 404 requirements.

So fire away. On the SEC's Website there is an electronic submission form.

Or you can send e-mail to rule-comments@sec.gov.

You can also send paper submission (in triplicate, of course) to:
Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-1090.

All submissions should refer to File Number 4-511.

And while you're at it, don't forget to tell us what you think of these latest developments.