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The AAO Weblog covers accounting issues and current events as they relate the practice of investment analysis. All posts prior to September, 2007 are in the public domain, but after September 4, only subscribers to The Analyst's Accounting Observer will see all posts going forward. Only selected, occasional posts will be released to the public domain from September 4 forward.

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A Sarbanes-Oxley Exception?
Location: BlogsAAO Weblog (Public)    
Posted by: Jack Ciesielski 6/24/2005 5:47 AM
Been a while since a Sarbanes-Oxley tidbit came this way...

This one will do. 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." (Go to www.cfodirect.com . You might have to register to get to the story link.)

Thirty percent of the private company CEOs said that the Sarbanes-Oxley Act has had or will have an impact on their businesses. Most of the "already affected" companies have been "improving their control documentation and testing, updating governance procedures, and strengthening their code of conduct or ethics." They view Sarbanes-Oxley compliance as a best practices issue, a way of preventing future problems rather than a cure for existing ones.

Only a third of those CEOs had invested considerable time in the process, and about half of the CEOs (in the 30% of the total group) were upbeat about the cost versus benefit equation: they expect a favorable payoff. The companies adopting Sarbanes-Oxley compliance policies tended to be the larger ones in the sample; they may have been concerned with their positioning because they expected to sell to another firm or go public.

Well, thirty percent is certainly not a majority of the survey. But - it's a surprisingly strong showing when you consider that private companies aren't even required to conform to the Act. It certainly runs counter to the typical press stories and to the posture of outfits like the U.S. Chamber of Commerce.
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