The Securities and Exchange Commission has established an advisory committee to assist it in examining the impact of the Sarbanes-Oxley Act and other aspects of the federal securities laws on smaller public companies.

“The Sarbanes-Oxley Act has already been of enormous benefit to America’s investors and markets and will spur further improvements. Now the time is ripe to review how the Act, including areas like internal control reporting, and other aspects of the SEC’s regulations affect smaller companies,” SEC chairman William Donaldson reporters Friday.

The SEC Advisory Committee on Smaller Public Companies will examine: frameworks for internal control over financial reporting at smaller companies, methods for management’s assessment of internal controls and standards for auditing internal control; corporate disclosure and reporting requirements and federally imposed corporate governance requirements for smaller companies, including differing regulatory requirements based on market capitalization, other measurements of size or market characteristics; accounting standards and financial reporting requirements for smaller firms; and, the process, requirements and exemptions relating to securities offerings from smaller companies.

The SEC will direct the committee to conduct its work with a view of protecting investors, considering whether the costs imposed by the current securities regulatory system for smaller companies are proportionate to the benefits, identifying methods of minimizing costs and maximizing benefits, and facilitating capital formation by smaller companies.

Donaldson also said the commission expects the committee to provide recommendations as to where and how it should draw lines to scale regulatory treatment for companies based on size.

In Canada, regulators have taken account of companies’ size when imposing requirements on public companies, similar to those demanded by Sarbanes-Oxley in the U.S.