Wednesday, February 09, 2005

J.D. Power: Nine out of 10 CFOs Say Benefit of Sarbanes-Oxley is Not Worth Cost

Nine out of 10 CFOs say that the costs of implementing the new rules and requirements associated with the Sarbanes-Oxley Act of 2002 are greater than the benefits of those changes, according to Ron Conlin, partner at J.D. Power and Associates, who spoke last Wednesday at the 10th Annual Forbes CFO Forum.

The forum, held in New York, focused on the shifting roles of CFOs today and what is necessary to improve company growth and profitability. Conlin, who spoke on the results of the J.D. Power and Associates Audit Firm Performance Study,SM emphasized that confidence in the auditing industry and performance are both down since Sarbanes-Oxley was initiated in 2002.

"Top management is concerned about the costs of implementing the extensive requirements associated with Sarbanes-Oxley compliance," said Conlin. "This concern is in addition to the increased workload necessary to comply with additional audit requirements. The results are lower accounting firm performance levels and a decline in the confidence of the accounting profession."

Audit committee chairs are also feeling the pressure of increased accountability and liability of the financial reporting process.

The study, which measures audit firm performance in the wake of the Sarbanes-Oxley Act, is based on interviews with 1,007 audit committee chairs and 944 chief financial officers.

J.D. Power: Nine out of 10 CFOs Say Benefit of Sarbanes-Oxley is Not Worth Cost

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