But a measure of relief may be on the way. The Securities and Exchange Commission's Advisory Committee on Smaller Public Companies, in a report to SEC Chairman Christopher Cox, is recommending that smaller public firms—those with market capitalizations under $800 million or so—be partially exempt from Section 404 of the Sarbanes-Oxley Act.

That's the part requiring costly internal financial control and audit systems—and often the hiring of a compliance officer. Microcap firms—those with market caps under $128 million—could receive a complete exemption. If Cox and Congress agree, small business with an eye on a potential IPO would be under less pressure to become Sarbanes-Oxley compliant.