SOX Center

To help CFOs of smaller companies navigate wisely through the Sarbanes-Oxley compliance process, Lord & Benoit has published a study, “10 Threats to SOX Compliance for Smaller Public Companies.”

The study comes on the heels of actions by the SEC and PCAOB to require smaller public companies to comply with SOX this year.

In summarizing the results, Lord & Benoit suggests this list should be used by CFOs as a starting point for a macro-level risk assessment at smaller public companies. Identifying potential concerns, developing action plans to remediate these risks, and taking quick action can minimize the likelihood of an adverse Section 404 report at the end of the first year of compliance.

SmartPros: Study Outlines SOX Threats for Smaller Public Companies

Think your private company is safe from new, stricter auditing standards because you’re not subject to Sarbanes Oxley? Feeling smug because you’re not experiencing the hassle and expense of SOX compliance? Thought you’d escaped the pain by taking your public company private?

Not so fast! Your time may have come: Statements of Auditing Standards 104-111 have arrived. These new standards affect every nonpublic company that needs an audit — whether it’s for bankers, insurers or shareholders. And they’re effective for financial statements for periods beginning on or after Dec. 15, 2006.

South Florida companies in all industries will be affected.

The good news is that, like SOX, these new standards are designed to help improve corporate governance, which could protect your company from risk. The new standards, dubbed ‘’risk assessment standards,'’ not only require your auditors to develop a better understanding of your internal controls and assess whether those controls would work if they were functioning as designed — they also require full documentation of these controls. The goal is for auditors to follow more specific protocols to support their opinions on whether financial statements are free from material misstatements.

MiamiHerald: New standards affect companies missed by Sarbanes Oxley