While Sarbanes-Oxley Act compliance costs decreased overall in 2006, the out-of-pocket costs associated with compliance rose from 2005 to 2006, according to a study planned for release on Thursday.

Foley & Lardner's fifth annual study measuring the financial impact of Sarbanes-Oxley on public companies finds that the cost of audit fees, board compensation, and legal fees continue to rise, despite an overall plateau in compliance costs that companies tend to see following initial implementation of Section 404 financial controls.

The burden of compliance is prompting an increasing number of respondents at the 93 public companies surveyed to consider going private or selling the company. This year, 23% of those answering the survey said they're considering transactions to take their company private, 16% said selling their company was a possibility, and 14% said they were considering a merger.

"It is interesting to note that respondents, who are asked to check all options that apply for this question, are increasingly seeking alternatives to going private," the study says. "We believe this is driven by increased awareness among the business community of the attractive prices currently being paid by private equity funds in the mergers and acquisitions market."

In 2006, 21% considered taking their company private, 10% thought about selling the business, and 8% considered a merger. And in 2005, 20% weighed the issue of going private, 10% considered selling the company, and 14% had some type of merger on their minds.

The number of respondents who believe Sarbanes-Oxley is too strict also continued to rise. This year, 84% of those answering the survey said the act was too strict, up from 82% in 2006 and 2005, and up from 67% in 2004.

Since the Sarbanes-Oxley Act became law in 2002, the average cost of compliance for companies with less than $1 billion in annual revenue has risen by over $1.7 million to reach $2.8 million in 2006, a 171% increase since 2003 but about the same as 2005.

For companied with annual revenue over $1 billion, the average cost of compliance increased 54%, rising from $8.1 million in 2003 to $12.4 million in 2006.