Do Small Companies Need a 404 Audit?

The article focuses on audit procedures for small companies under the U.S. Sarbanes-Oxley Act (SOX). It states that the primary detriment of SOX is the added cost involved. Cromwell Coulson, chief executive officer of the securities information processor Pink Sheets LLC, said that accounting costs are no longer in the control of the audit's client because the vendor-client testimony from the audit process was removed. He also said that SOX does not handle the type of information that would be seen on a registration statement and that for investor information concerning small companies, the audit isn't as significant. The article states that generally accepted accounting principles focuses more on historical information which is less important in judging smaller emerging companies.