Complying with the Sarbanes-Oxley Act costs an average of $78,474 for smaller public companies, less than government projections and less than 1% of the companies’ average revenue, according to a report released Wednesday.

The U.S. Securities and Exchange Commission had predicted compliance costs of $91,000 for smaller public companies, technically those with less than $75 million in market capitalization. "Since its enactment, complaints of spiraling compliance costs have flooded the halls of Congress," states the report, written by Bob Benoit of Lord & Benoit in Massachusetts, a research and consulting firm that focuses on SOX compliance for smaller public companies.

Congress passed SOX in 2002 after corporate fraud scandals at Enron, WorldCom, and Tyco. Large companies have faced SOX requirements since 2004, but Congress has granted several delays to smaller companies. Because of these delays, accounting standards for internal controls applied to smaller public companies today are less strict than those followed by non-public companies, who are regulated by the American Institute of Certified Public Accountants, Benoit writes.

Congress is considering further delays for smaller public companies. Without additional delays, these companies would have to present a management assessment of internal controls over financial reporting in this fiscal year, and get an outside auditor's attestation in fiscal years ending after Dec. 15, 2008.

Benoit's study looked at 29 companies from a wide variety of industries with an average market cap of $24.7 million and revenue of $9.7 million. Lord & Benoit had contacted more than 3,000 smaller public companies, but only 29 responded. "More respondents were expected, but many companies apparently chose to delay their compliance efforts due to the widespread belief that another extension could be granted," Benoit writes.

Benoit found average costs of $53,724 for complying with the SOX management-assessment requirements, and a projected cost of $24,750 for complying with the auditor-attestation portion.

Proponents of more delays argue that smaller public companies face proportionally higher compliance costs than larger firms. Nationwide spending on SOX compliance was $5.5 billion in 2004 and now is more than $6 billion annually, according to AMR Research.

Nearly 5,000 large public companies are required to follow Sarbanes-Oxley, Benoit has said. SEC reports from 2006 put the number of smaller public companies nationwide at 7,402.