On Tuesday Cox addressed the House Financial Services Committee, of which he is a former member and on which Rep. Michael Oxley is the current chairman. Oxley is the co-creator of Sarbanes-Oxley legislation.

In prepared testimony, Cox admitted "the act is not perfect in every respect," but said that since SOX was passed in 2002, countries around the world have adopted similar provisions, including auditor oversight bodies and audit committee independence.

He also addressed Section 404 – what he called "the one notable exception to the largely positive record of change wrought by the Sarbanes-Oxley Act." In particular, he cited part two of that provision, which requires an auditor's evaluation of management's own internal controls assessment. Cox discussed how other countries have – with caution -- implemented a similar provision. For instance, Brazil and Australia require an evaluation, but do not require that it be made public.

In the United States, Cox recognized that smaller public companies have struggled with "unnecessary costs" as they tried to implement Section 404 compliance. "While a portion of the first-year compliance expense undoubtedly reflected start-up costs — and, in many cases, long-neglected maintenance by companies of their internal control systems and procedures — it is undeniable that some of the costs were attributable to excessive, duplicative, or misdirected efforts on the part of companies and their registered public accounting firms," he said.

Cox outlined what the SEC has accomplished to remedy implementation barriers, including additional guidance, a proposal to extend the compliance deadline for smaller public companies, and a transition period for newly public companies.

The committee also heard testimony from Mark Olson, chairman of the Public Company Accounting Oversight Board since July 2006. Olson said his board has established an independent auditor oversight program to protect the interests of investors, and is working to make internal control audits efficient by monitoring how auditors implement Auditing Standard No. 2 (an integrated audit of both internal control over financial reporting and the financial statements themselves).

The hearing came on the heels of a controversial move made by the PCAOB a week earlier, when the board dispatched investigators to a U.K. Ernst & Young office, raising questions about SOX's reach and the PCAOB's authority.

The SEC and PCAOB have been working together to make 404 compliance more efficient.

In a statement released prior to the hearing, Rep. Oxley said he sympathized with small business complaints regarding Section 404 compliance costs. He said the hearing would help the committee understand how the SEC and PCAOB have assisted public companies in their efforts to comply with the act.