Private companies choosing Sarbox

While listed companies complain, private businesses embrace the benefits of controvesial act

Written by Paul Grant

An increasing number of private companies are choosing to comply with the Sarbanes-Oxley Act, even though they are not required to, it has been reported.

Despite many publicly-traded corporations claiming the measures are expensive and burdensome, with some avoiding listing in the US or looking to escape the US market because of the demands, others are now opting in to the requirements of the act, according to the Wall Street Journal.

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Reasons for private companies moving to Sarbox range from having investors who hope the company will soon go public, to believing the measures will make their businesses more efficient. Pressure from lenders and customers, as well as a desire to prevent fraud, have also been listed as reasons.

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