Impact of the Sarbanes-Oxley Act (SOX)

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Assume that you are a CEO of a medium-sized company that
needs a significant influx of cash for several expansion projects. As the CEO,
you must determine whether your company should remain private or go public.
Some companies postpone going public due to the unpredictability of economic
and market conditions. Consider the ramifications of both alternatives.
Construct an argument for and against going public. Before providing your
response, review the guidelines and regulations associated with going public by
visiting Small Business and the SEC located at http://www.sec.gov/info/smallbus/qasbsec.htm.

Use the Internet to research SOX law, located at http://www.sarbanes-oxley-101.com/sarbanes-oxley-compliance.htm.

Write a four to five (4-5) page paper in which you:

  1. Outline
    three (3) ways in which your medium-sized private company may benefit
    from going public, providing a rationale for each.
  2. Create
    an argument that the same goals may be achieved if the company remains a
    privately held entity. Provide support for your argument.
  3. When
    a company decides to go public, it can typically obtain capital by
    issuing stocks or bonds. Suggest four (4) leading financial ratios that
    will be evaluated and how each will impact the company’s decision to
    obtain expansion funds. Determine whether the results of the ratios would
    alter the decision to go public. 
  4. By
    researching the results of SOX compliance surveys, assess the financial
    impact that SOX might have on your company if it decides to go public.
    Considering the impact of SOX compliance, take a position as to whether
    your company can overcome the challenges posed by SOX compliance if the
    decision is to go public. Based on your research, support your decision
    by identifying the potential advantages and disadvantages that SOX may
    have on your company. Provide specific examples.
  5. Make
    a recommendation as the CEO regarding the alternative (i.e., going public
    or staying private) that will best support the company’s expansion goals.
    Support your position.
  6. Use
    at least four (4) quality academic resources in this assignment. Note:
    Wikipedia and other Websites do not qualify as academic resources.

Your assignment must follow these formatting requirements:

    • Be
      typed, double spaced, using Times New Roman font (size 12), with one-inch
      margins on all sides; citations and references must follow APA or
      school-specific format. Check with your professor for any additional
      instructions.
    • Include
      a cover page containing the title of the assignment, the student’s name,
      the professor’s name, the course title, and the date. The cover page and
      the reference page are not included in the required assignment page
      length.

The specific course learning outcomes associated with this
assignment are:

    • Analyze
      financial reports, prepare analysis, and draw conclusions based on the
      financial analysis.
    • Calculate
      and interpret various financial and operating ratios used in business.
    • Use
      technology and information resources to research issues in accounting
      management.
    • Write
      clearly and concisely about accounting management using proper writing
      mechanics.

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