Impact of Sarbanes-Oxley on Private and Nonprofit Companies

Source:  Second annual study by Foley & Lardner LLP, The Impact of Sarbanes-Oxley on Private & Nonprofit Companies

Seventy-eight percent of private organizations in the Foley & Lardner survey have self- imposed corporate governance reforms, compared to 60 percent in 2004. Many of the reforms being adopted are those that are relatively inexpensive, such as CEO/CFO certification of financial statements, independent directors, corporate ethical codes, whistle-blower procedures, and approval of non-audit services by the boards.

It remains to be seen whether Section 404 audits of internal financial controls will be adopted.

Some of the reasons given by private organizations for adopting self-imposed corporate governance reforms are:

·    Audit committees believe SOX represents best practices.

·    Companies want to be prepared for future IPOs or sales.

·    SOX may become a requirement for entities with significant institutional debt.

·    It is viewed as just good business.

For the complete study, go to http://www.foley.com/about/genpage.aspx?genpageID=000017107424