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U.S. Companies Consider Going Private to Skirt Sarbanes Oxley

U.S. Companies Consider Going Private to Skirt Sarbanes Oxley

by Rick Turoczy on September 16, 2004

“Any company under $100 million in revenues has to be asking itself whether it’s worth it to stay public,” said Brent Longnecker, president of Longnecker & Associates, a Houston-based consulting firm for executive compliance and corporate governance. He estimates that the cost of being public has risen more than 150 percent over the past year because of the new federal regulations.

Longnecker said he knows of six small private companies that dropped plans to go public and four small public companies in the South and Midwest that have requested analysis of the pros and cons of going private, as a result of the Sarbanes-Oxley law. A major reason for higher costs is the new requirement to audit internal controls — an area that accountants previously neglected because it might trigger lawsuits against them if audit clients went bust.

U.S. Companies Consider Going Private to Skirt Sarbanes Oxley

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