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Consulting Case Interview Practice Questions

Category - Strategy

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Sarbanes-Oxley (SOX) might keep a firm from going public for which of the following reasons?

Compliance cost
Health care costs
Liquidity requirements
ARPU
All of the above

Explanation

Answer: a - Sarbanes-Oxley was a result of the Enron/Tyco/WorldCom corporate scandal and requires substantial additional overhead to meet compliance and reporting requirements.

Key Takeaway: When looking at exit situations for small companies, an IPO is less attractive because being public means substantial overhead to meet SOX compliance standards.

Photo: President George W. Bush and Sen. Paul Sarbanes. White House Press Photo.

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Consulting Case Interview Practice Questions

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Consulting Case Interview Practice Questions

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