Tuesday, March 22, 2005

Sarbanes-Oxley Spending In 2004 More Than Expected

The first year of complying with section 404 of the Sarbanes-Oxley Act has come at a steep cost for many businesses, with greater-than-anticipated personnel, consulting, auditing, and software expenses, according to a survey by Financial Executives International, a professional association of CFOs, treasurers, and financial controllers.

The good news is that the cost of compliance efforts is expected to decrease this year as IT projects undertaken to meeting the financial-reporting requirements of section 404 progress.

The survey, conducted in March among companies with average revenue of $5 billion, showed that spending for section 404 compliance averaged $4.4 million in 2004. That's higher than the average $3.1 million companies estimated that they would spend in 2004 in a similar survey conducted last July.

Expenditures for external services such as consulting averaged $1.7 million in 2004, up from an expected $1 million in the July survey, while auditing costs averaged $1.3 million, compared with the $820,000 expected in July.

Sarbanes-Oxley Spending In 2004 More Than Expected

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