WASHINGTON, D.C. (July 11, 2006) – Jim Greenwood, president and CEO of the Biotechnology Industry Organization (BIO), issued the following statement in response to the Securities and Exchange Commission’s (SEC) publication of the Sarbanes-Oxley Concept Release today. The document is a prelude to the SEC’s forthcoming guidance for the management in assessing a public company’s internal controls for financial reporting.
“Today’s release indicates that the SEC understands the heavy cost burdens associated with the one-size-fits-all approach of Section 404 (internal controls) of the corporate governance act. BIO supports the Sarbanes-Oxley Act, but seeks internal controls that are scaled and proportionate to a public company’s revenues.
“We appreciate the SEC taking steps to incorporate practical, risk-based reform of Sarbanes-Oxley. BIO intends to work with the SEC and other stakeholders in shaping the final guidance so that it does not place unnecessary burdens on smaller public companies,” Greenwood said.
The SEC will accept stakeholder comments on the Concept Release over the next 60 days. In its comments, BIO will provide a detailed reform framework that takes a risk-based, cost-effective approach to internal controls. Section 404 should be based on the level of product revenues, which defines the complexity of corporate structures and the need for increased controls.
BIO represents more than 1,100 biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and 31 other nations. BIO members are involved in the research and development of healthcare, agricultural, industrial and environmental biotechnology products.