A pair of Orange County businesses are among the hundreds of publicly traded companies that recently said they didn’t meet a March 16 deadline to file their annual reports with the Securities and Exchange Commission.
The holdup: Section 404 of the landmark Sarbanes-Oxley Act, legislation that was passed in 2002 in the wake of accounting scandals at Enron Corp., Arthur Andersen and others.
Section 404 is the most notorious part of Sarbanes-Oxley. It requires publicly traded companies to provide extensive details and an evaluation of its financial reporting controls and accounting procedures, such as how inventory and payroll are monitored.
This is the first year that companies reporting their annual results as of Dec. 31 must comply.
“Accountants are struggling through this period,they have so many clients that need 404 work,” said Scott Shean, a corporate partner in the Costa Mesa office of Los Angeles law firm Latham & Watkins LLP.
The local late filers include San Clemente-based Biolase Technology Inc. and Newport Beach-based Impac Mortgage Holdings Inc.
The companies cited a delay in evaluating their internal controls assessment.
For more on this story, see the March 28 edition of the Orange County Business Journal.
