Audits have gotten more complicated, and that means more auditors will be using more specialists. But what qualifications does a specialist need to be entrusted with a role in an audit?

Securities and Exchange Commission enforcement director Stephen M. Cutler, whose tenure included investigations of some of the largest financial reporting failures in the nation's history, is leaving the commission next month to return to the private sector, the agency said. The agency has not yet named a successor.

Amid an investigation into its disclosures and accounting practices, Raytheon Co. placed its chief financial officer on leave at the same time that it announced that it had submitted a settlement offer to the Securities and Exchange Commission and settled a shareholder lawsuit.

The Securities and Exchange Commission voted to delay the effective date of a Financial Accounting Standards Board rule that requires companies to treat employee stock options as expenses.

The cost of compliance associated with Section 404 of the Sarbanes-Oxley Act are expected to drop significantly for some companies, according to a report commissioned by the Big Four audit firms.

The Securities and Exchange Commission is reportedly expected to change the effective date for new stock option accounting rules that will require companies to include employee stock-option compensation as an expense on their earnings reports, giving most U.S. companies a six-month reprieve.

Maintaining the morale of employees charged with ensuring Sarbanes-Oxley compliance in their companies remains the largest challenge to 404 compliance, according to a just-released survey. Nearly half of the 200 executives participating in the 2005 Financial Executive Report, conducted by Oversight Systems, indicated that employee morale was the largest issue in SOX 404 compliance, while reducing internal and external costs ranked as the second-most-frequently cited challenge to ongoing compliance. "Obviously, complying with Section 404 of Sarbanes-Oxley has been extremely expensive," said Joseph V. Carcello, co-founder and director of research for the University of Tennessee's Corporate Governance Center and an advisor to Oversight Systems. "However, stronger controls lead to real benefits in the form of eliminating waste, eliminating abuse, and [producing] better information for improved decision-making." To reduce the burden on employees and compliance costs, 60 percent of financial executives surveyed said that they are implementing software that automates the manual processes required for compliance. Other survey findings included: o 49 percent said that SOX compliance resulted in reduced risk of fraud and errors; o 48 percent indicated that they now have more efficient financial operations; and, o 31 percent said that error rates have declined. The survey is available at www.oversightsystems.com/survey.html.