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pre-IPO and private companies
Sarbanes-Oxley, what's all the fuss about?

If your company is considering becoming a public company, it will have to comply with the requirements of the Sarbanes-Oxley Act of 2002. The Sarbanes-Oxley Act requires all public companies to certify they have strong internal controls over financial reporting and their financials are free from material misstatement.

The challenge for most pre-IPO companies is to comply with all the Sarbanes-Oxley requirements while growing the company to meet its financial and business targets. The challenge entails moving from informal business practices towards a structured and controlled business environment.

At SCG, our goal is to help your company grow while helping you comply with all its compliance requirements. The result is growth that is strategic, tactical and realistic. We can help understand the SOX requirements through education, training and implementation.

Minimum Requirements of Sarbanes-Oxley:

The Sarbanes-Oxley Act spells out many requirements including certifications of key officers, governance activities and transparency to shareholders through strong financial controls. As a result of this, it is easy to get overwhelmed by the details. Therefore, we decided to simplify the details by writing a book called, Sarbanes-Oxley Simplified, which makes it easy to understand and spells out the minimum requirements to comply with the law.

What's the Value of Sarbanes-Oxley?

After understanding the requirements of SOX, your company will want to know the value of SOX and how it can assist your company improve its financial reporting and business practices without losing your company's entrepreneurial spirit.

Through the Sarbanes-Oxley process, our clients have achieved the following benefits:

Improved Financial Reporting

Stronger Business Processes

Eliminated Waste and Duplicated Processes

Better Co-ordination between functions

Better Corporate Governance

We have heard SOX is costly. Is that true?

We understand each company is unique and has its own challenges, which can increase costs of implementation. Generally speaking, the costs of compliance are dependent on how well the company has established its control structure and has documented its financial reporting processes. However, from the lessons learned from our previous engagements, the benefits of SOX far outweigh the costs of compliance.

At SCG, our knowledge, methodologies and tool sets can help your company comply efficiently without the burdens monopolizing time and company resources. Ultimately, our goal is to help empower your personnel to reduce the costs of compliance and improve the contribution of each team member through education and training.

Positioning the Company for Sale and or Attracting Capital:

If your company is considering selling a business unit or the entire company to a publicly traded company in the U.S., it is important for you team to understand how Sarbanes-Oxley impacts the buyer's decision and due diligence process. Because public companies must comply with the Act, it will assess the control effectiveness of the selling company before it consummates the deal. The impact to the selling company is that it should be SOX compliant before the deal is done.

Similarly, more and more venture capitalists and investment bankers are requiring a certain level of internal control compliance before they make investment decision in raising capital.

At SCG, our goal is to prepare your company for these transactions by performing readiness assessments before the M&A transaction is complete.


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