Big4Guy

Corporates today grow through mergers and acquisitions of other businesses. As companies grapple with M&A activities on one hand, there they also need to be concerned about sarbanes oxley implications of the mergers / acquisitions. Certain requirements of the Sarbanes Oxley act are applicable in case of mergers and acquisitions.

Let's first talk about the section 16 reporting requirements. SOX requires that section 16 transactions are reported on Form 4 on the second business day after the transaction occurs. Similarly, section 16 transactions also need to be reported on EDGAR and the company's website. Earlier the limit for reporting was set as 45 days from the day of the transaction. However, the same has now been made on 2nd business day from the day of transactions. Another requirement asks for acquiror to disclose due diligence and integration plans in the post closing and quarterly reports. All the above requirements have made the entire merger and acquisition activity more cumbersome. It is upto the acquisition teams to better coordinate M & A activities for Sarbanes Oxley compliance.

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