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Private firms are implementing Sarbanes Oxley



       

 

 


  
Private firms are implementing Sarbanes Oxley

 


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Recently PricewaterhouseCoopers interviewed CEOs of 341 privately-held product and service companies identified in the media as the fastest growing U.S. businesses over the last five years. The surveyed companies range in size from approximately $5 million to $150 million in revenue/sales.

They discovered that many private companies, although not legally required to do so, are improving controls and documentation using recommendations contained in the 2002 Sarbanes Oxley Law. Better governance procedures and strengthened ethics and codes of conduct are the other major reported benefits.

These private companies who have implemented new procedures often regard Sarbanes Oxley regulations as best practice guidelines and are keen to use them where possible.

Those involved in Sarbanes-Oxley-related initiatives see them primarily as a “best business practice” and a means to head-off future or potential problems—not necessarily a method for solving current problems.

Another motivation involves future disposition of the company, including a potential sale, and possibly going public:

  • A "best business practice
   60%
  • To address future or potential problem
   59%
  • Recommended by an outside constituent (Lender, stockholder, advisor, vendor)
   43%
  • Considering future sale of business to another company
   26%
  • To solve present business problems
   19%
  • Considering going public (IPO)
   17%
  • Other reasons (volunteered)
   14%


CEO's reported that potential Benefits Will Likely:

  • Far exceed the costs 5%
  • Somewhat exceed the costs 21%
  • Be a breakeven proposition 22%
  • Costs will exceed benefits 43%
  • Not certain/ Not reported 9%

This shows that there can be a point where cost versus improvements are beneficial for the company, but can become less usefull as more regulations from Sarbanes oxley are implemented.

 

  

 

 

 

      
       
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