From: Paul F. Leone |
Now I have lost complete faith in the SEC... because companies complain about cost they are no longer going to be required to play nice in the sand box and maintain controls that just might protect john q public????????? I am a career auditor, been in the profession since 1973 and your committee's recommendations are completely without merit . 1. The committee was primarily comprised of CFO types, none of whom want to be burdened with doing the right thing. 2. corruption and lack of control is blind to market cap. It happens because of people not company size. 3. your assumption that smaller companies require less control or are better controlled is absolutely ludicrous. I have audited large and small companies, larger then most of the folks on your committee and smaller then most of the folks on your committee.. truth is micro caps are desperately in need of controls and at times more so then the larger companies who more often then not realize they need to spend dollars to achieve adequate levels of control. 4. 404 won't stop another Enron. Enron was about criminal activity and collusion.. what 404 if allowed to continue in its present from will do is protect john q public from some of the players that go public (usually in the micro cap size get rich quick, run the company into the ground, and screw the everyday stockholder mode) and you and your committee will be fostering that continued behavior. These companies need discipline and regardless of its cost and perhaps misconceived flaws it DOES provide discipline to companies. I for one will divest all my stock holdings in every small cap company as soon as you adopt these ridiculous recommendations. 5.lets take for an example A company whose market cap was in line with a large company and still subject to 404, but because of mismanagement and poor controls they squandered their capital (raised from an unknowing public) and now fall into the micro cap category. Will your reward them for that by absolving them from the requirements of 404???? That is insanity..!!!!your committee should rethink their position.. because if companies wanted to do the right thing there would have been no 404 in the first place, the sad truth is they do not want to do the right thing -- it is all about wiggle room... And 404 albeit costly (and only because the CPA s have milked it for all its worth--the same CPAs that closed a blind eye to lack of controls since I have been in the business world -- who are now permitted to abuse the law and create processes for compliance that are costly and idiotic)..404 can be implemented cost effectively if you leave the vultures out of it is the only thing that keeps management somewhat honest. I am appalled at the committee's recommendations. On a another topic, the SEC should require that before a company can make an IPO its executives must attend training regarding ethics, accounting requirements, SOX, fiduciary responsibility to shareholders, etc, and should be tested on their knowledge of these and other maters of corporate culture before the SEC subjects the public to get rich quick types who know nothing or care less about running an ethical controlled organization Sorry about all the typos in the prior email I hit send in error because your committee's report really annoyed me today! Paul F. Leone |