By researching the results of SOX compliance surveys, assess the financial impact that SOX might have on your company if it decides to go public. Considering the impact of SOX compliance, take a position as to whether your company can overcome the challenges posed by SOX compliance if the decision is to go public. Based on your research, support your decision by identifying the potential advantages and disadvantages that SOX may have on your company. Provide specific examples.
Make a recommendation as the CEO regarding the alternative (i.e., going public or staying private) that will best support the company's expansion goals. Support your position.
SOX Compliance Surveys
The Sarbanes Oxley Act of 2002 (SOX) created a number of important changes for firms that wished to issue securities to the public. For example, auditors started to report to the board of directors rather than management and chief operating officers had to sign that they read and understood the financial statements. Most stakeholders in the capital markets and issuers agree that these were good for all. It created better independence for the auditors and sharpened the CEO's eye in financial matters.
What is most controversial about SOX is the requirement for issuers to review and test their internal controls and then have the auditors test those tests and issue a report on the controls surrounding the financial reporting system. So, the auditors have two reports to issue, one on whether the controls are working and another on whether the financial statements fairly report the results of the firm according to GAAP. This requirement increased audit fees substantially, especially the first year of compliance, and the benefits were hard to ...
Your tutorial is 699 words and a reference. It contains three tables from a survey of SOX compliance.