{"id":304,"date":"2007-06-06T07:00:32","date_gmt":"2007-06-06T15:00:32","guid":{"rendered":"http:\/\/www.formtek.com\/blog\/?p=304"},"modified":"2007-06-06T07:00:32","modified_gmt":"2007-06-06T15:00:32","slug":"compliance-costs-drop-as","status":"publish","type":"post","link":"https:\/\/formtek.com\/blog\/compliance-costs-drop-as\/","title":{"rendered":"Compliance: Costs Drop as Sarbanes-Oxley Becomes Standard Practice"},"content":{"rendered":"

The sixth of a series of survey<\/a>s by Financial Executives International (FEI) about Sarbanes-Oxley was recently released. Somewhat surprisingly, the study found that total costs of compliance at large corporations dropped 23% over the past year and 35% when compared to the previous year.<\/p>\n

200 companies with average revenues of $6.8 billion were included in a poll that tries to measure how they are coping with Section 404 of Sarbanes-Oxley. The survey attributes companies becoming more efficient as the reason for the reduction in costs.<\/p>\n

Three years into Sarbanes-Oxley many of these large companies have already gone through the pain associated with startup, but now the processes are in place and are slowly being accepted as standard business procedure.<\/p>\n

While internal costs related to compliance are dropping, the study finds that fees associated with mandatory external audits have not changed.<\/p>\n

Those companies that were able to centralize their compliance operations saw the greatest savings<\/a>. The average annual cost of compliance at companies with centralized systems was $1.7 million, compared to nearly $4.0 million for those companies with decentralized operations.<\/p>\n

Most companies still feel though that the costs far outweigh the benefits of Sarbanes-Oxley. Only 22% of those surveyed felt that Sarbanes-Oxley provided greater value than the costs needed to implement it — although that number climbed a little from only 15% the previous year.<\/p>\n

On the positive side, 46% said that their financial reports have become more accurate, and 48% felt they were also more reliable. 34% thought that Sarbanes-Oxley helped to prevent or detect fraud.<\/p>\n

The perception of Sarbanes-Oxley is slowly changing. Perhaps in time it will be viewed more as a competitive advantage for companies rather than as a cost burden.<\/p>\n

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The sixth of a series of surveys by Financial Executives International (FEI) about Sarbanes-Oxley was recently released. Somewhat surprisingly, the study found that total costs of compliance at large corporations dropped 23% over the past year and 35% when compared…<\/span><\/p>\n

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