What: All Issues : Government Checks on Corporate Power : S 761. (Science and education competitiveness) Motion to defeat an amendment exempting smaller companies from certain financial auditing requirements by DeMint of South Carolina/On the motion to table (2007 senate Roll Call 139)
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S 761. (Science and education competitiveness) Motion to defeat an amendment exempting smaller companies from certain financial auditing requirements by DeMint of South Carolina/On the motion to table
senate Roll Call 139     Apr 24, 2007
Progressive Position:
Yea
Progressive Result:
Win
Qualifies as polarizing?
Yes
Is this vote crucial?
No

This vote was on a motion to defeat an amendment that had been offered to the underlying bill by Jim DeMint, R-S.C. The amendment would have exempted smaller companies from certain auditing requirements laid out in the accounting law known as "Sarbanes-Oxley." The amendment defined a smaller company as those worth less than $700 million, with revenue of less than $125 million, or fewer than 1,500 shareholders. It was offered to a bill that seeks to bolster America's position in the global marketplace by increasing funding for a wide array of educational and research initiatives related to math, science and engineering.

Sarbanes-Oxley was enacted in 2002 as a response to a number of major accounting scandals at large companies such as Enron. The law established new standards and tightened old standards for all public companies and public accounting firms. One of the provisions outlined in the law requires public companies to occasionally audit their internal controls for ensuring the accuracy of financial data.

DeMint said this section has imposed a "heavy cost among small, publicly traded companies without a proportional benefit."

"Small businesses in the United States, afraid of complying with the complicated provisions of Sarbanes-Oxley, are choosing not to grow by listing publicly and are, instead, staying small and remaining private. This prevents capital formation, it stunts job growth, and it makes our country less competitive in the global economy," DeMint said.

Chris Dodd, D-Conn., said if the amendment were implemented, it would exempt about 80 percent of the companies that currently have to comply with this audit requirement. Dodd added that the chairman of the Securities and Exchange Commission (SEC) -- himself a Republican appointee -- has said that this particular section does not need to be changed.

"It is very premature to jump in at this juncture while the SEC is doing the job we asked them to do, acting responsibly, and performing their public functions under good leadership," Dodd said. He then made a motion that the amendment should be "tabled" (or defeated), and a vote was called on that motion.

The amendment was defeated by a vote of 62-35. Democrats were almost unanimous in defeating the amendment, with one defector: Mary Landrieu, D-La. Most Republicans voted to support the amendment, though they were more fractured, with 14 voting with Democrats. Thus, DeMint's amendment was defeated, and the bill went forward without language that would have exempted smaller companies from complying with certain auditing requirements.

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