Visions of orange jumpsuits and leg chains paralyze corporate decision makers, yet a new fact of life called Sarbannes Oxley compliance shapes the true value of a company in ownership transition and can unintentionally add up to two years to a prospective transaction.
Companies that are planning an IPO or will be acquired by a public company are required to have 2 years of SOX compliance prior to the transaction. Implementing compliant systems and processes is expensive and time consuming. Yet a lack of SOX compliant system and processes could result in a reduced valuation of the business, a lost sale opportunity or increased cost of the transaction. While SOX compliance may seem onerous, it is also good business practice. The best approach is to build in the business system and process infrastructure around SOX requirements.
SOX Compliance Solution
Today the majority of vendor business systems, hardware, data base systems and operating systems comply with SOX transaction requirements. The key is business process. When these systems are implemented correctly with associated business processes and maintained they will ensure continual SOX compliance. In that way SOX compliance becomes a standard way of doing business and not an expensive project that must be completed before a major transaction can be accomplished.
LJRCS can help you be prepare. We perform a SOX Compliance Review from which we recommend:
- Software changes and/or upgrades
- Business process and control changes
- IT control changes
- Security procedures