SBE Council President & CEO Karen Kerrigan said: "The Sarbanes-Oxley Act has placed significant burdens on the small business community, piling on with unnecessary regulatory costs and discouraging many firms from going public. The legislation has made it more difficult for entrepreneurial firms to gain access to the capital they need to grow, innovate and create jobs. The Supreme Court's decision brought some accountability to this law. Sarbanes-Oxley gave enormous regulatory powers to the Public Company Accounting Oversight Board. Yet, this board was not accountable to our elected officials."
The Supreme Court ruled that the Securities Exchange Commission (SEC) must be able to remove board members from the Public Company Accounting Oversight Board (PCAOB) "at will." The current structure is not designed to hold PCAOB fully accountable to elected officials and the American people. The Supreme Court ruled that this is unconstitutional.
Kerrigan added: "We are grateful to our friends at the Competitive Enterprise Institute's Free Enterprise Fund for mounting this critical challenge. Our hope is that the Congress sees this ruling as an opportunity to reform other parts of Sarbox that are harming our economy and stunting the growth of promising enterprises. Already there is agreement that small companies are being harmed by Sarbox, and therefore they have been permanently exempt from the PCAOB's internal control mandates. However, companies above the exemption threshold - indeed all companies bound by these costly rules - are being unnecessarily burdened by a complex law that is consuming extraordinary amounts of capital."
Leonard Steinberg, SBE Council Member and small business tax advisor, declared: "The Supreme Court decision regarding the unconstitutionality of Sarbanes-Oxley PCAOB is a major victory for the small business community. Since the inception of Sarbanes-Oxley, the small business community has been disproportionately and negatively affected by the onerous procedural and compliance requirements and costs. It is now up to Congress to complete the process and remove the remaining barriers that hold back the small business entrepreneur. This is a win for America."