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As a push to rework and rein in Sarbanes-Oxley gains steam, lawyers will gather at Boalt Hall School of Law on Friday for a symposium on how the strict new accounting law has worked in the real world. The prime topic at the conference, hosted by the Berkeley Center for Law, Business and the Economy, is whether small public companies should be exempt from the rigorous and expensive auditing requirements imposed by the corporate governance reforms enacted by Congress in mid-2002 � an attempt to prevent Enron-like scandals. A panel of corporate law scholars, economists, regulators, investors and lawyers will present new research seeking to measure the economic impact of the law on businesses, particularly small companies, according to the center’s executive director, Dana Welch. “This is probably the leading issue facing corporate lawyers and small businesses today,” Welch said. “We hope that by presenting both sides of the debate we can figure out whether what’s needed is reform calibration or more regulation.” The Securities and Exchange Commission has conducted hearings on the issue and is awaiting a final report from the Advisory Committee on Smaller Public Companies in April. Regulators have already moved compliance deadlines several times for the smallest of the nation’s public companies, and the SEC’s advisory panel has also already recommended that small businesses need not comply with some or all of Section 404 of the act. But at least one of the studies scheduled to be presented on Friday suggests that exempting small public companies may not be a good idea. San Francisco-based independent research firm Glass, Lewis & Co., headed by former SEC chief accountant Lynn Turner, found that more than 11 percent of U.S. public companies with market caps below $250 million restated their results. That was nearly twice the rate at which companies valued at more than $2.5 billion restated. The research firm has monitored the explosion in financial restatements in recent years. Its new study shows that 8.5 percent of all U.S. companies restated their financial results last year, compared with 4.5 percent in 2004. “The claim is that Sarbanes-Oxley is driving small companies out of the public market and is costing them a lot of money and making it harder for them, but there is a counter argument that smaller companies become bigger companies, and if you don’t put those controls in now, then there is a chance that some of them will become an Enron,” Welch said. Conference panelists include Turner; Harvey Goldschmid, a former SEC commissioner and Columbia University law professor; Haywood Gilliam Jr., head of the U.S. Attorney’s Office Securities Fraud Section; Steven Bochner, head of the SEC Advisory Committee for Smaller Companies and partner at Wilson Sonsini Goodrich & Rosati; and Dennis Johnson, CalPERS portfolio manager for corporate governance.

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