Foley's fourth annual study, The Cost of Being Public in the Era of Sarbanes-Oxley, reveals the overall cost of being public in 2005 dropped slightly from the historic levels seen in 2004. The costs associated with corporate governance reform dropped 16 percent for companies with under $1 billion in annual revenue and six percent for companies with over $1 billion in annual revenue.

The reductions between 2004 and 2005 were driven by large decreases in costs associated with lost productivity, legal fees and corporate governance set-up costs. However, these decreases were largely offset by year-over-year increases in audit fees, D&O insurance and board compensation for companies of all sizes. 

With S&P small-cap companies experiencing a 22 percent increase in audit fees in 2005 compared with six percent for S&P mid-cap and four percent for S&P 500 companies, this year's study provides support for the perception that Section 404 disproportionately impacts smaller public companies.

Download The Cost of Being Public in the Era of Sarbanes-Oxley.

Read the Press Release.