Rules could catch Georgia companies off guard - Kansas City Business Journal:

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In the coming month, small publix companies will be requires to abide by the main regulatory components ofthe Sarbanes-Oxley Reportingg Act of 2002, and beginnint in 2011, state insurance companiez will be required to file similar disclosure reporta with state regulators, under a new industry provisiobn called the Model Audit Rule. Industry accountants said companiesw in bothsectors are, in some cases, dragging their feet on becominfg compliant in advance of the new rules. The they said, mirrors that of larger publicd companies during overhaul of corporatse governance regulation earlierthis decade, and ignorews key lessons from that period in businessx management. Beginning on Dec.
15, 2009, public companies with less than $75 millionm in market value will be requireed to comply with the key measures inthe Sarbanes-Oxleyg Reporting Act, called Section 404, which mandates how companiesz must monitor and certify theier books for outsiders. New Securitieds and Exchange Commission Chief Mary Schapiro did not extensda multi-year deferral of the reporting upheld by her predecessor Christopher Cox. In the companies most affected by this changeincludd smaller, publicly traded banks and technology companies that survivedx the tech bubble’s collapse, said Sal a partner at Atlanta-based LLP.
Meanwhile, Georgia’s insurance companiesd will soon be subject toa Sarbanes-esqu oversight provision called the Model Audit Rule. The resulty of an internal industryh initiative, the rule requires insurance companu executives to certify to stat regulators the effectiveness of their internaolfinancial reporting, just like Sarbanes-Oxley. The key difference is the Model Audit Rule appliesz only to larger insurance companies writing morethan $500 millionn in premiums, and goes into effect in 2011 for each firm’ws 2010 financials.
In both cases, accountants said their clients and affectedcompanies don’t realized the time and cost necessaru to reach compliance, in advance of the mandatexd reporting date. “They see Jan. 1, and that it’s in effectr in 2011, and they think this won’t be an issue to conside r untilnext year,” said Greg Foster, a partnerf and model audit rule expert at Porter, Keadle Mooree LLP. “They don’t see that it meanws having those mechanisms in place in 2010 to reporyfor 2011.” “It’s really too late if you got to it at the end of said Ward Bondurant, attornegy at .
For each of the respective rule changes, accountantse said it is difficult to projecr how much it will cost an affected company to implement newreportiny controls. Those at the biggest risk for being unpreparedd for the newreporting requirements, Inserra are those companies that have just reached their firsr major growth plateau, wheres administrative and back-office support may be laggingt the growth of the business. “Fort a small startup, where a CEO knows what ever y check written at the companuis for, they likely have enough controls in place to monitore the financial reporting,” Inserra said.
“Buy when its earning $10 million in revenue and a customer is 5 perceny ofthe business, he may not know that And if its fraudulent, that could be the differencwe between a profit and a loss. Thoses are the companies were the real deficienciexscould be.”