Menlo Park, Calif. (Sept. 12, 2003) -- Should privately held companies apply corporate governance standards that are mandated for publicly traded companies to their own businesses? A recent survey found that many chief financial officers from nonpublic companies say, “Yes.”

The survey is part of a white paper, “The Impact of Sarbanes-Oxley on Private Business.” It found that 38 percent of CFOs at private firms agreed they would benefit from implementing the same practices as are required of public companies under the act.

In addition, 52 percent of CFOs from firms with 500 or more employees agreed that nonpublic companies should take action in response to Sarbanes-Oxley, while just 37 percent of CFOs from companies with 99 employees or less advocate change.

Accounting and finance staffing firm Robert Half International Inc. commissioned the survey of 1,356 CFOs from privately held companies to address the issue of governance.

As part of the survey, CFOs were asked, “Do you agree or disagree that private companies should implement the same type of governance and control practices that the Sarbanes-Oxley Act of 2002 requires of publicly held firms?”

Their responses:

  • Agree strongly - 12 percent
  • Agree somewhat - 26 percent
  • Disagree somewhat - 17 percent
  • Disagree strongly - 7 percent
  • Undecided - 38 percent

Research for the white paper also revealed additional practices that private firms are adopting to enhance their corporate governance and internal control processes. These include: certification of financial statements to external parties, adoption of a formal code of ethics, and separation of professional services provided by external accounting firms to avoid potential conflicts of interest.International Communications Research conducted the survey, which is based on a stratified random sample of private U.S. companies with 20 or more employees.
-- WebCPA staff

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