Friday, June 16, 2006

Sarbanes-Oxley Compliance Costs Drop Less Than Expected

The cost for publicly held companies to comply with Sarbanes-Oxley (SOX) legislation dropped in 2005, but the decline was less than many expected.

That was one of the main conclusions of a report issued Thursday by the Foley & Lardner law firm on SOX, which was passed by Congress in 2002 in response to major corporate and accounting scandals involving prominent U.S. companies.

According to the study, the cost of being public for companies with under $1 billion in annual revenue dropped by 16 percent. For companies with more than $1 billion in annual revenue, the costs dropped 6 percent.

"Contrary to many predictions made in 2005 and anecdotal stories reported this year, average audit fees did not drop in the second quarter after Section 404 requirements phased in for U.S. companies with $75 million of more in market capitalization," the report said.

Sarbanes-Oxley Compliance Costs Drop Less Than Expected

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