Page 1 - Accume SOX Toolkit

Sarbanes-Oxley Compliance for Newly Public Companies: Are There

Cost Effective Implementation Options Available?

For newly public companies challenged with the daunting task of complying
with the requirements under Section 404 as either accelerated or non-accelerated
filers under the Sarbanes-Oxley Act (SOX) the effort required and cost of

implementation can be significant.

CURRENT FILING REQUIREMENTS

Currently newly public companies are required to fully comply with the

requirements of Sarbanes-Oxley on the next fiscal year end following the filing of
their first SEC Form 10K. This puts companies immediately on the clock for
compliance post IPO.

The current guidance provided under Auditing Standard 5 and the new COSO
2013 guidance can make this process difficult to achieve under such tight

timelines, especially if they have limited resources.

AUDITOR REQUIREMENTS

In most cases given the lack of internal resources focused on internal audit

company management will typically engage an independent internal audit firm
who specializes in this process to perform an assessment of internal controls over
financial reporting utilizing the guidance provided by Auditing Standard 5 and

the COSO 2013 Internal Control – Integrated Framework. Newly public
companies are required to ensure that their internal controls are in place and
operating sufficiently to obtain this opinion.

PLANNING IS KEY

Companies should engage their internal auditor specialists early in the SOX
compliance process. By engaging a specialist the company can obtain a complete
understanding of the scope of the SOX compliance process and the expectations

surrounding the level of documentation and testing required to confirm that
controls exist, are documented appropriately, and operating effectively on a

consistent basis throughout the year. The Company’s external audit firm should