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It doesn’t happen often, but last week securities regulators gave in-house lawyers like Kirk Williams a reason to smile. The rule-making machine at the Securities and Exchange Commission spit out a set of much-anticipated guidelines with an added bonus of a delayed effective date. The extension gives Williams, general counsel of San Jose’s Sunrise Telecom Inc., an extra year to comply with one of the more arduous provisions contained in last summer’s mammoth corporate governance reform law, the Sarbanes-Oxley Act. “Folks were feeling pretty jammed,” Williams said. “With the extra year, hopefully that will give folks plenty of breathing room, at this company included.” Lawyers in house and at firms have been waiting anxiously for the SEC to explain how they are to comply with a set of Sarbanes provisions on internal company accounting. The provision requires companies to explain in their securities filings exactly how employees came up with raw financial data used to calculate a company’s financials. Further, auditors will have to sign off on the explanations. Everyone was working under the assumption that companies had to comply with the provision in this year’s annual report, which would have to be filed early in 2004. It sounds like plenty of time, but Williams said people were scrambling to pull apart and re-examine every aspect of the company’s record keeping. Plus, until the SEC issued its guidelines for what kind of information companies had to include, they were risking doing it wrong and wasting precious time, Williams said. “We had spent a lot of time thinking about that and working with the auditors,” Williams said, “and of course, they’ve been vague in the absence of SEC rules.” With the SEC’s missive last week, now everyone has some guidelines to work with and a lot more time to digest them, Williams said. The SEC’s delay may have stopped the clock for now, but it doesn’t let company executives and lawyers off the hook from explaining how companies count their widgets. Williams, though, said he’s ready to work on complying with all of the provisions of Sarbanes. “Even though it made securities regulations and regulations applicable to public companies more rigid,” Williams said, “it really just codified a number of things that had been discussed for a number of years.”

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