Sox_SME

Book Review: Sarbanes-Oxley for Small Businesses by Peggy Jackson

Dave Kinnear 1-On Leadership, Book Reviews

For some time now, the small to midsized enterprises I serve have been “complaining” about the cost of Sarbanes-Oxley (SOX) legislation. Even private businesses recognize that they must be aware of the resulting SOX regulations. For almost as long, I have been working to change their perspective to one of making lemonade from the supposed lemons foisted upon us.

Jackson has, in great fashion, made the case for “leveraging compliance for maximum advantage.” She firsts makes the case why small businesses should be concerned about SOX – 1. Business trend is to hold CFOs accountable for veracity of financials and tax returns, 2. Publicly traded Banks prefer clients who are SOX compliant, 3. SOX generates best practices that are now the ‘gold standard’ for management, 4. Boards are being held accountable, and 5. Sources of capital (VCs) demand transparency. The value of the company is obviously enhanced if one meets at least the spirit of SOX regulations. At the same time, small companies, public or private, may need to work hard at containing the internal control costs.

The balance of this book is taken up providing detailed outlines of best practice implementations which are tailored for the small business. First up are the two requirements that apply to private businesses (a surprise to some that SOX has any provisions for privately held firms) which are the Document Retention Policy and Whistleblower Policy requirements. Jackson provides sample policies as well as “talking points” for company leadership and employees. Even the documents on your company web site are included in the policy considerations.

Next up are the “Blueprints for Success” which are detailed implementation plans for gaining the most out of best practices resulting from SOX regulation. From practical suggestions such as “Compliance with the new policies and procedures is an absolute condition of continued employment” to outlines for identifying what has potential for damaging your business are part of the blueprints.

This small book (145 pages) is crammed with practical, down to earth explanations and advice for how to turn the SOX lemon into Best Practice Lemonade.

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