Tuesday, November 16, 2004

Sarbanes-Oxley Is Now a Fact of Business Life

Like it or not, the Sarbanes-Oxley Act (SOX) is not going away. In fact, companies are stepping up their response and have been spending significantly this year on compliance. SOX legislation was enacted to protect shareholders and the general public from accounting errors and fraudulent practices in the enterprise, and is used to define corporate records (electronic and otherwise) to be stored and for how long. Based on detailed survey results with more than 70 companies conducted in the fourth quarter of 2003 and subsequent 2004 research, we estimated this year's SOX spending would be $5.5 billion, with more than half—nearly $3 billion—in hard expenditures impacting bottom-line performances.

Many companies entered the SOX maelstrom thinking the bulk of money they spent to comply would be a one-time expense. Unfortunately, that does not appear to be the case. Based on a later survey in May, spending has continued to escalate.

Sarbanes-Oxley Is Now a Fact of Business Life

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