SOX timetable/deadlines? 2396

  • What is the timeframe a company has to become SOX compliant following their IPO? I had heard they have up to two years but did not know if that was the case or not. Thanks in advance for your help.

  • Hi and welcome to the forums 🙂
    I would research this more thoroughly, as it’s my understanding that SOX compliancy starts applying immediately , although there are differing provisions based on the size of the company.
    Please copy these links to your browser:
    http-and-#58;// compliance after ipo
    The immediate compliancy aspects come from this article:
    Once a company becomes an issuer the full range of Sarbanes-Oxley applies except for those provisions, which do not by their terms apply to a given company. For instance, the prohibitions on loans to executive officers and directors would apply to a company immediately upon filing its S-1 or other form of IPO registration statement. Likewise, all of the auditor independence and audit partner rotation provisions, and requirements as to disclosure of material correcting adjustments and off-balance sheet and pro-forma information would apply immediately. Some of these provisions are worded in terms of filings under the Exchange Act, which applies to companies once they go public. However, the financial statements filed as part of the IPO registration statement become the basis for a company’s Exchange Act filings, making even these provisions applicable upon filing of the IPO registration statement.

  • I appreciate your response. I will look through the links provided and see if those offer better insight.

  • I recommend to go to the website to Final Rule Releases to the year 2006 and to check out Release no. 33-8760 dated 15 December 2006 Internal Control Over Financial Reporting in Exchange Act Periodic Reports of Non-Accelerated Filers and Newly Public Companies
    Basically most sections of the Sarbanes-Oxley Act will apply after you have filed the registration statements for the security with the Securities and Exchange Commission. There is a one year exemption for new public companies for compliance with section 404 of the Sarbanes-Oxley Act (management’s assessment of the effectiveness of internal control over financial reporting and the auditor’s attestation to the effectiveness of ICFR) in the first year after their IPO, which is described in the final rule above.

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