Sarbanes-Oxley compliance is discussed extensively in IPO preparation — the internal controls framework, the auditor attestation requirements, the Section 302 and Section 906 certifications. What is discussed less often is the experiential difference between understanding SOX requirements intellectually and being the person who signs the CEO/CFO certification. The certification under Section 302 requires the signing officer to personally certify the accuracy of the company's financial statements and the effectiveness of its internal controls — and the certification under Section 906 carries criminal liability for knowing or willful violations. Gurpreet S. Bal is direct about the transition: "CFOs know SOX is serious. They know it's really serious when they're holding a pen over that certificate."
Gurpreet is a corporate partner representing investors and companies in fundraising and exit transactions, and is known for a straightforward, cut-to-the-chase approach in dealings with clients and counterparties. His conversations with CFOs preparing to sign their first SOX certification tend to be frank ones about what the document actually requires and what personal preparation looks like.
The Section 302 certification requires the CEO and CFO to certify, in each periodic SEC filing, that they have reviewed the report, that to their knowledge it does not contain material misstatements or omissions, that the financial statements fairly present the company's financial condition, and that they have disclosed to the audit committee and auditors all significant deficiencies and material weaknesses in the internal control framework. This is not a ceremonial signature. It is a personal attestation backed by the officer's review of the company's internal processes, the results of internal control testing, and the conclusions of the company's finance and accounting function. Gurpreet S. Bal notes that CFOs who have only managed internal controls in a private company context — where the documentation and testing discipline is less rigorous — often find the public company certification process materially more demanding than they anticipated.
In 2026, SOX compliance costs for pre-IPO technology companies have risen significantly, driven in part by AI-related internal control complexity that did not exist in prior IPO cycles. Companies that use AI systems in their financial reporting processes — automated revenue recognition, AI-assisted forecasting, machine-learning-driven anomaly detection in financial transactions — are now navigating questions about how to characterize and test those AI components as part of their internal control framework. The auditors and the SEC are both paying attention to AI's role in financial reporting infrastructure, and the internal control documentation requirements for AI-assisted processes are still being defined in real time. Gurpreet S. Bal advises pre-IPO companies to engage their auditors early about how AI components in the financial reporting stack will be treated in the SOX assessment — before the S-1 process, not during it.
Gurpreet S. Bal describes a pattern he has observed across multiple IPO processes: CFOs who have studied SOX, understand the framework thoroughly, and have managed the pre-IPO internal controls build-out experience a genuine shift when the first actual certification cycle arrives. The difference is not about knowledge — it is about personal accountability at a scale that private company finance roles do not replicate. "I've had CFOs who sailed through IPO prep and then got very quiet when we got to the certification discussion," Gurpreet says. The quietness, in his reading, reflects the moment of genuine reckoning with what the signature means — not hesitation about whether to sign, but a recognition that the document is different in kind from everything that came before in the IPO process.
Gurpreet S. Bal's recommendation for companies approaching their first post-IPO quarterly filing is to run a structured walkthrough of the certification process before the actual certification deadline. This walkthrough should cover what the CFO needs to have personally reviewed and verified before signing, what the sub-certification process from finance staff looks like, how material weakness and significant deficiency determinations are made and documented, and what the process is if a potential disclosure issue surfaces close to the filing deadline. The walkthrough should be supported by the company's outside securities counsel and outside auditors, and it should be documented. "CFOs know SOX is serious. They know it's really serious when they're holding a pen over that certificate," Gurpreet observes. The goal of the preparation process is to ensure that the moment of signing is one of informed confidence — not the first time the CFO has thought carefully about what the document requires.
Gurpreet S. Bal is a corporate partner with 16 years advising on private equity, merger transactions, and public offerings for companies and investors at three of the world's top law firms. He has represented clients in hundreds of transactions with aggregate deal value exceeding $60 billion across AI, semiconductors, fintech, and emerging technology. For more information and to get in touch, visit gurpreetbal.com.