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A Sarbox Sec. 201 Surprise

A Sarbox Sec. 201 Surprise

by Rick Turoczy on December 2, 2005

Section 201 of the Sarbanes-Oxley Act — which states that auditors cannot perform tax work for clients — will put many small-cap companies at a crossroads. According to tax consultancy experts at Capital J Advisors (a firm that would likely benefit from the situation), companies with a market cap under $200 million will be pressured either to hire additional in-house tax experts or to outsource some or all of their tax work.

The worrisome part, says James Walsh of Capital J, is that small-cap companies are increasingly becoming international, with customers, suppliers, and sometimes facilities dotting the globe. Many will seek to hire a $70,000-per-year tax manager and be done with it. But they may be in for a surprise.

A Sarbox Sec. 201 Surprise

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