Tuesday, March 04, 2008

Compliance Week Survey: Sarbanes-Oxley Improvements on the Decline

Exclusive new research from Compliance Week shows companies that made improvements to their internal control over financial reporting in the wake of The Sarbanes-Oxley Act of 2002 (SOX) are expecting fewer improvements over time. The results also suggest that Auditing Standard No. 5 (AS5)—a new, more relaxed auditing standard approved last year by the Securities and Exchange Commission—may not be helping to streamline SOX compliance as much as hoped.

A Compliance Week survey of nearly 300 public companies finds that three-quarters reduced their number of “key controls” significantly during their first year of meeting SOX requirements—with 14 percent of them reducing key controls by between 60 and 80 percent. “Key controls” are the internal checks and balances that companies use to ensure that their financial reporting processes are timely and reliable. Section 404 of Sarbanes-Oxley required that companies assess their controls and that auditors sign off on the effectiveness of those controls. In theory, as a company reduces the number of key controls, it simplifies its financial reporting process, decreases the risk of error or financial misstatement, and reduces the cost of SOX compliance.

Labels: as5, Compliance Week, reduce key controls, survey

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Wednesday, November 28, 2007

Center for Audit Quality Survey Finds Majority of Nation's Investors Support Sarbanes Oxley Act

In a telephone survey conducted July 17-23, 2007, the Glover Park Group asked a series of
questions related to investing, the capital markets and Sarbanes-Oxley. A summary of the
findings representing 1,001 investors nationally are included below.

With a sample of this size, one can say with 95% certainty that the results have a sampling
error of +/- 3 percentage points of what they would be if the entire population of investors had
been polled with complete accuracy.

Confidence in capital markets:
• A large majority (84%) of investors express confidence in the US capital markets, with 39%
saying they have quite a bit or a great deal of confidence. (Q6)
• In contrast, 65% of investors have confidence in the capital markets outside of the US, with
only 22% indicating quite a bit or a great deal of confidence in those markets. (Q7)

Review the entire survey at CAQ.

Labels: CAQ, survey

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Wednesday, May 16, 2007

FEI Survey: Management Drives Sarbanes-Oxley Compliance Costs Down by 23%, But Auditor Fees Virtually Unchanged

Financial Executives International (FEI) announced today the results of its sixth Sarbanes-Oxley compliance survey, which found that Section 404 compliance cost Corporate America less in year three of adoption than in each of the first two years. FEI polled 200 companies to gauge experiences in complying with Section 404. Responding companies have average revenues of $6.8 billion.

According to the FEI survey, which included 172 "accelerated filers" -- companies with market capitalizations above $75 million -- total average cost for Section 404 compliance was $2.9 million during fiscal year 2006, which represents a 23 percent decrease from 2005 totals. The data also shows reductions in internal and external costs of compliance, with internal staff time decreasing by 10 percent. The lower costs can be attributed to companies' increased efficiencies in complying with Section 404.

FEI Survey: Management Drives Sarbanes-Oxley Compliance Costs Down by 23%, But Auditor Fees Virtually Unchanged

Labels: compliance costs, FEI, survey

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