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SEC announces a one-year extension for foreign private issuers

Important Sarbanes-Oxley information for non-accelerated filers and foreign private issuers

The Securities and Exchange Commission announced March 2, 2005, that companies who are not required to file annual and quarterly reports on an accelerated basis (i.e. non-accelerated filers), as well as foreign private issuers filing annual reports on Form 20-F or 40-F, must now comply with the internal control over financial reporting requirements for their first fiscal year ending on or after July 15, 2006.

This represents a one-year extension from the previously established July 15, 2005, compliance date for non-accelerated filers and foreign private issuers. The SEC similarly extended the compliance date for these companies relating to requirements regarding evaluation of internal control over financial reporting and management certification requirements.

According to Dan Halpern head of Deloitte Brightman Almagor’s ERS Group, "it is not worthwhile for companies to halt any Sarbanes-Oxley Readiness progress they have made.  It is recommended that they complete the efforts they have begun, in order for their Independent Auditors perform a "dry run" internal control assessment on the 2005 Financial Statements".  "Furthermore," adds Halpern, "companies that pro-actively implement the law's requirements will enjoy other business benefits, as many companies have revealed that their Sarbanes-Oxley Readiness projects have helped them improve the overall efficiency and effectiveness of their company's business processes."

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