Lower Risks, Improve Processes and Increase Efficiencies With SOX Compliance

Lower Risks, Improve Processes and Increase Efficiencies With SOX Compliance
Cannabtimes

<![CDATA[As emerging companies experience significant growth, they also experience more challenges, including increased exposure to risk, new compliance requirements, and adapting processes and procedures. Companies may not realize these issues as challenges until some triggering activity occurs, such as fraudulent activity or a system breakdown, or when they decide they want to prepare for listing on a public exchange.To be listed on a U.S. stock exchange, companies have to become U.S. Securities and Exchange Commission (SEC) registrants and must comply with certain requirements, including the Sarbanes-Oxley Act of 2002 (SOX). Being publicly listed isn’t the only reason companies become SEC registrants, though. Among other reasons, it helps raise capital, teeing up potential expansion opportunities, and provides credibility to the company, which inspires confidence from investors.Regardless of why a company registers with the SEC, it still must comply with SOX. Becoming SOX-compliant can be challenging and time-consuming for many companies by nature of its complexity and multifaceted requirements. The requirements are meant to ensure the company has the appropriate internal controls and processes in place to prepare accurate financial statements and disclosures.  SOX is a bipartisan bill created in response to the large number of financial scandals from public companies that happened around the early 2000s. The bill demanded transparency and corporate responsibility and created several layers of oversight for public companies to protect investors and to prevent Enron-size scandals from happening again, and it has proven to work.  Not All Challenges Are Built the Same, Especially for Cannabis CompaniesStartups in any industry generally feel overwhelmed with SOX compliance because they usually have a lean back-office staff, in which people are wearing multiple hats and may not be used to the rigorous control environment requirements. What these companies may not realize is SOX compliance is the responsibility of the entire company,…

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