A Securities and Exchange Commission advisory panel formally recommended Thursday that thousands of small public companies be excused from complying with a key requirement of the 2002 Sarbanes-Oxley Act.

In its final meeting, the Advisory Committee on Smaller Public Companies wrapped up its report recommending the SEC roll back a number of rules as they affect small companies. The most controversial change would allow the agency to ease �404 financial reporting over internal controls. An estimated 80 percent of public companies would benefit from the exemption, which would allow them to escape from the rule mandating that an outside auditor attest to their internal controls’ effectiveness.

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