Smaller Firms Embrace Sarbanes-Oxley Rules

Expensive, onerous and unnecessary — those are a few of the complaints U.S. publicly traded companies have leveled at the Sarbanes-Oxley Act, designed to keep companies honest. Yet auditors say an increasing number of closely held companies are complying with parts of the corporate-reform law — even though they don’t have to.

Some of these private-sector companies have investors who hope the company will one day go public, or will be acquired. Others think adhering to the law’s requirements will make their businesses more efficient. Still others face pressure from lenders or customers, including government agencies, who value the strong internal controls required by Sarbanes-Oxley.

By JACLYNE BADAL AND PHRED DVORAK
Staff Reporters of The Wall Street Journal

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