SarbanesOxley for PrePublic Companies

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Sarbanes-Oxley for Pre-Public Companies

• Katy Yeager
• Executive VP, Horn Murdock Cole
• May 31, 2006

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Why You Should Care (cont.)

• ARC Morgan study of 350 SEC registered companies
• 62 of CFOs left the company immediately before
  or within 3 months after the weakness was
  disclosed
• 86 of weaknesses were discovered by external
  auditors, not management
• 50 of weaknesses were fraud related
• Auditor fees increased 150 after weakness
  reported

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Things To Do Now

• Best practices should be strived for, such as
• An independent audit committee, which includes a
  financial expert
• Code of Ethics
• Whistleblower program
• Documentation of Policies Procedures
• Start SOX process early to ensure that controls
  are working for the entire year of assessment