Tuesday, April 12, 2005

Employee Morale Threatens Sarbanes-Oxley Compliance, Driving Companies to Automate Manual Processes, Reports New Oversight Systems Survey

Oversight Systems Inc. today announced the results of the 2005 Oversight Systems Financial Executive Report on Sarbanes-Oxley, a survey of more than 200 financial executives. Nearly half of financial executives feel the biggest issue related to SOX compliance is the need to maintain the morale of the employees responsible for compliance. Reducing internal and external costs ranked as the second most frequently cited challenge to ongoing compliance.

The survey also reveals that most financial executives say that after implementing SOX requirements to remediate control deficiencies, most companies have seen bottom-line business benefits. Nearly half, 49 percent, say SOX compliance resulted in reduced risk of fraud and errors; 48 percent say they now have more efficient financial operations; and 31 percent say error rates have declined. Of the group, only 14 percent said that remediating control deficiencies has had no real effect on financial operations; and a handful, 12 percent, report less efficient financial operations after complying with SOX.

"Obviously, complying with Section 404 of Sarbanes-Oxley has been extremely expensive," said Joseph V. Carcello, co-founder & director of research for the University of Tennessee's Corporate Governance Center. "However, stronger controls lead to real benefits in the form of eliminating waste, eliminating abuse and better information for improved decision making." Carcello is also an advisor to Oversight Systems.

Employee Morale Threatens Sarbanes-Oxley Compliance, Driving Companies to Automate Manual Processes, Reports New Oversight Systems Survey

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