For years, commentators have been saying that Sarbanes Oxley has created too many costs that discourage companies from going public. In response, US Congress has passed legislation that allows small businesses to opt out of costly internal-control measures under the Sarbanes-Oxley Act for up to 10 years after going public. .
But now, CFO.com reports of a new study showing that things are much more complex. A study from Ernst & Young, which looked at the data from 26 companies that went public in the past two years, showed there were other costs, that had nothing to do with Sarbanes-Oxley. These companies had revenues ranging from below $100 million to more than $4 billion, in the health care, real estate, biopharmaceuticals, technology, retail, industrial-products, financial-services, and manufacturing sectors.
The study found that that most of the costs were on compensating officers and directors post-IPO, not to mention the costs of various advisers. The magazine reports: "Operating as a public company adds about $2.5 million, on average, to a company's cost structure, with $1.5 million of that devoted to higher compensation for CEOs, CFOs, and others in the finance function, such as investor-relations professionals, according to the survey. That figure also covers increased board costs, as more than 80% of companies had either added new members to their boards or increased director compensation prior to their IPO."
Nothing whatsoever to do with Sarbanes-Oxley. It's more about greed.
no comment untill now