IMPACT OF THE SARBANES-OXLEY ACT (SOX)
Outline three (3) ways in which your medium-sized private company may benefit from going public, providing a rationale for each.
Supporters of companies going public suggest that gaining additional capital is one of the benefits medium sized companies gain by going public. The rationale for going public is to float the shares of the company through the stock market by starting an initial public offer (IPO) inviting the public to purchase its shares and raise additional capital. Once the company has met all of the requirements for filing Security Stock and Exchange (SEC) they are in compliance with SOX. Under SOX section 404, requires all CEO and CFO to certify and report to the public the effectiveness of internal control over the financial statements.
Secondly, corporate social responsibility (CSR) is another benefit accrued by a medium sized company by going public through publication of it information. Aside from profitability, corporate social responsibility aids company to position ineffective market-based solutions to social. By CSR redirect negative problems caused by corporate operations onto the consumer and protecting their interests while hampering efforts to find just and sustainable solutions. The rationale of publishing company information is to give the company a platform to state its willingness to take into consideration the stakes of all stakeholders involved in its financing and operations. This increases public confidence in the company. Going public also benefits a medium sized company by increasing its competitive advantage in the global market. Going public is a strategic objective by some medium sized companies to become competitively aligned. Finally, gain competitive advantage all through expanded capital base and improved public confidence.
Create an argument that the same goals may be achieved if the company remains a