However, small companies have expressed their frustration with the financial and time constraints that SOX places on them. About half of small companies feel that SOX regulation has made it harder for them to successfully conduct business, according to a new study released by SAP America Inc. In addition, two-thirds of small businesses favor differing sets of compliance standards for small and large companies.

Interestingly, the study found that 10 percent of companies intend to ignore Sarbanes-Oxley regulation altogether. They are holding out for an eventual repeal for small and midsized businesses (SMBs). Publicly owned small companies are the biggest supporters of different regulations for SMBs, with 86 percent of decision-makers supporting a separate set of rules.

In contrast, businesses that have moved forward with compliance initiatives are outsourcing or cutting back in areas to meet compliance cost demands: 42 percent of companies have outsourced SOX compliance, 18 percent are cutting marketing and/or research and development and 16 percent have reduced their head counts to scale back costs.

The survey was conducted in October 2005 on the heels of a decision by the Securities and Exchange Commission to delay compliance requirements for small businesses until July 2007.