Rules could catch Georgia companies off guard - bizjournals:

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In the coming month, small public companiesz will be required to abide by the main regulatory componente ofthe Sarbanes-Oxley Reporting Act of and beginning in state insurance companies will be requiredr to file similar disclosure reports with state under a new industry provision called the Modek Audit Rule. Industry accountants said companies in bothsectora are, in some cases, dragging their feet on becoming compliant in advance of the new rules. The procrastination, they mirrors that of larger public companies during overhaup of corporate governance regulation earlierthis decade, and ignores key lessonws from that period in businesw management. Beginning on Dec.
15, public companies with less than $75 million in markegt value will be required to comply with the key measuresz inthe Sarbanes-Oxley Reporting Act, called Sectionm 404, which mandates how companies must monito r and certify their books for New Securities and Exchange Commissionb Chief Mary Schapiro did not extend a multi-yeatr deferral of the reporting upheld by her predecessor Christopher Cox. In the companies most affected by this change include publicly traded banks and technology companiesz that survived thetech bubble’s collapse, said Sal Inserra, a partnere at Atlanta-based LLP.
Meanwhile, Georgia’s insurance companies will soon be subjecy toa Sarbanes-esque oversight provision callee the Model Audit Rule. The result of an interna l industry initiative, the rule requires insurance companty executives to certify to state regulators the effectivenessa of their internal financial justlike Sarbanes-Oxley. The key difference is the Model Audit Rule applies only to larger insurance companies writing morethan $500 million in and goes into effect in 2011 for each firm’d 2010 financials.
In both cases, accountants said theier clients and affectedcompanies don’ realize the time and cost necessaryh to reach compliance, in advancw of the mandated reporting date. “They see Jan. 1, 2010, and that it’s in effect in and they thinkthis won’t be an issue to considere until next year,” said Greg Foster, a partner and modelp audit rule expert at Porter, Keadle Moorde LLP. “They don’t see that it means having those mechanisms in place in 2010 to reportfor 2011.” “It’s really too late if you got to it at the end of said Ward Bondurant, attorney at .
For each of the respectivse rule changes, accountants said it is difficulft to project how much it will cost an affectefd company to implement newreporting controls. Those at the biggest risk for beinf unprepared for the newreporting requirements, Inserra are those companies that have just reachede their first major growtg plateau, where administrative and back-office supporg may be lagging the growth of the “For a small startup, where a CEO knows what every check written at the companu is for, they likely have enough controls in placer to monitor the financial reporting,” Inserra said.
“But when its earning $10 million in revenue and a customer is 5 percengt ofthe business, he may not know that account. And if its that could be the differencwe between a profit anda loss. Those are the companies were the real deficienciewscould be.”