Business may get Sarbanes-Oxley relief

NEW YORK (CNNMoney.com) -- Businesses that have been complaining about the cost of complying with the Sarbanes-Oxley corporate reporting regulations will get some, but not all, of the relief they've been seeking, according to a published report.

The Wall Street Journal reported Friday that federal regulators have said they will propose guidance next month to help companies and auditors interpret one section of the law, passed in the wake of the Enron accounting scandal, in a way likely to save them time and money.

The regulation, known as Section 404, requires companies first review their own systems for ensuring accurate financial reports and then have them tested by outside auditors. The Journal reports that companies have complained the rule requires them to spend many hours and that large companies spent an average of $3.8 million each in fiscal 2005 complying with the rule and documenting things that have nothing to do with the integrity of their financial statements.

The Securities and Exchange Commission has already acknowledged problems with the rule. The paper reports SEC Chairman Christopher Cox wrote a letter to the Public Company Accounting Oversight Board, the auditing industry's overseer, in which he said the SEC agreed that the standard for complying with the rule needed to be focused on matters that are relevant to a company's financial results. He also urged that the rule be adapted to companies based on the company's size.

The paper reports the changes won't be good news for all businesses. Besides the major accounting firms that have seen their billings rise due to companies complying with the rule, the paper said that software providers such as Microsoft (Charts), SAP (Charts), Oracle (Charts) and IBM (Charts) have created a variety of software products to help firms comply with the rule.

Still, despite the relief from Section 404 of the law, the paper reports that Democrats' success in Tuesday's congressional elections makes wholesale changes in the legislation less likely. But it did report that U.S. Rep. Barney Frank, D-Mass., who is in line to be the new chairman of the House Financial Services Committee, has said some regulations are too burdensome.

Fortune: Stop whining about Sarbanes-Oxley