The Securities and Exchange Commission (SEC) unanimously approved new guidance to help public companies strengthen their internal control and reducing unnecessary costs. The new guidelines focus on smaller companies. This are an update to Section 404 of the Sarbanes-Oxley Act of 2002. Companies subject to the 404 auditing requirements have complained that that the Section 404 auditing requirements were onerous and expensive.

Financial Executives International (FEI) has issued their yearly survey of audit costs for the 404 section of Sarbanes-Oxley. They report that average billing for audits was $2.9 million in 2006. This is a reduction of 23 percent from 2005. FEI attributes the reduction in costs to auditing efficiencies. The companies reported that internal time on the audits has dropped 10%.