Another unintended consequence of Sarbanes Oxley

The Lord & Benoit report noted above makes much of what it calls "The Unintended Paradox." Sarbanes Oxley of course was meant to instill confidence in the financial reports of public companies. It has largely succeeded at the large company level. As for smaller companies, the critical Section 404 requirements, notably the requirement for auditor attestation of internal controls, has been repeatedly delayed. Meanwhile, nonpublic companies are now required by the AICPA to have auditors "evaluate the design of controls relevant to the financial statements and determine whether or not the control has been implemented." 404-like to say the least. So for the moment, the control standards for nonpublic small companies are more rigorous than for public companies. Imagine that.  

For more:
- see the report (reg. req.)