Corporate governance can make or break an IPO, according to advisory firm KPMG. Governance topped the ranking of biggest headaches faced by companies preparing to go public, recent KPMG surveys found. And Aamir Husain, national leader for IPO Services at KPMG, says that corporate governance can be such an issue that it can kill an IPO.

The work involved in improving corporate governance can be overwhelming and complex. There is compliance with SarbOx, quarterly reports with the SEC, the annual 10k, robust auditing and internal controls -- numerous systems and processes that need to be in place.

Husain gave an example: a $2 billion company acquired another $2 billion company, where the books, records and controls were so weak, that the newly formed company needed to get its house in order before it could go public.

The clean up took 10 months and by then, it was the fall of 2008, just around the time of the financial meltdown. "They missed their window of opportunity," said Husain. Two years later, they continue to wait for a stronger economic environment to move forward on their IPO.

Companies considering an initial public offering say that corporate governance tops their list of challenges, according to the recent series of surveys by KPMG. When asked to name their three biggest headaches, 64 percent said improving corporate governance; 40 percent said preparation of a robust business plan and 36 percent said preparation of a financial track record.

"You have to ask yourself do you have the systems and processes, the infrastructure to be a public company and to sustain them?" says Husain. "You need to report quarterly to the SEC in a timely fashion as the SEC has gotten more stringent about how quickly companies have to report to the public," pointed out.

"If you're late for filing your first quarterly or SEC filing, the second is missing earnings right out of the gate," he added.

The challenges of corporate governance are huge and take time. The executives surveyed by KPMG said they believed it would take their company 6-12 months to prepare for an IPO, while 15 percent said it would take 12-18 months to get ready to go.

However, for some companies there is pressure to speed up the going-public timeline. A lot of private equity funds, for example, expect companies to go public in a short period of time. "Instead of four-five years, there is a push for companies to go public in two-three years, as there is a lot of pressure to return liquidity to investors," said Husain.

According to the survey, companies that were considering going public had already undertaken organizational changes in response to a planned IPO, including strengthening financial and accounting systems (69 percent); upgrading internal controls (52 percent); being accountable for quarterly results (40 percent), and developing a robust business plan (40 percent).

Preparation is key. When the market is ripe for the picking, those that are prepared will be the first ones out of IPO queue and in the best position to get the capital they need to grow their companies.