CFOs Credit Experience, Technology Systems with Trimming Sarbanes-Oxley Costs
A new survey says that companies are using experience and IT systems to cut compliance costs, but that auditing services are still expensive.
CIO — Sarbanes-Oxley cost less to implement in 2006 than in the previous two years, but the cost to comply with the financial accountability law isn't worth the effort, according to a survey of 200 financial executives.
The survey, by Financial Executives International, credited "increased efficiencies, a positive learning curve, and technical systems and software rollouts" for an average 23 percent decrease in the costs of complying with Sarbanes-Oxley Section 404. That section of the law requires each company's annual report to contain a statement saying that management is responsible for adequate internal controls and financial reporting, and an assessment of the effectiveness of those financial controls.
Michael P. Cangemi, FEI president and CEO, noted in a statement that companies are doing well at becoming more efficient, spending less time and reducing costs to comply with Sarbanes-Oxley, but auditors' fees "are virtually unchanged" over the past three years. The group, whose 15,000 members include CFOs, treasurers and controllers, hopes for regulators to find ways to help companies reduce those costs, Cangemi said. See the statement here.
The survey of 200 companies, a group that had average revenues of $6.8 billion, found that those with centralized financial operations had much lower costs for complying with Sarbanes-Oxley.
