Sticker shock comes at a variety of pricing tiers.

For those old enough to remember the economy and dependability of the Volkswagen of the 60s and early 70s, it’s hard to feign calm when you discover that the 2004 version now costs more than your first house.

In the same automotive vein, have any of you filled your cars up lately only to discover that a gallon of gas in many parts of the country is priced higher than a mocha grande at Starbucks?

Since 2002, publicly traded companies have had their own version of sticker shock in the form of Sarbanes-Oxley.

The minute President George W. Bush signed the corporate reform measure into law nearly two years ago, legions of calculators at Fortune 500 companies have been working overtime to project just what the costs of  SOX compliance are going to do to their respective revenue models.

And in many cases it’s not comforting news.

Various studies on the costs of implementing SOX have ranged from an average of nearly $5 million for the nation’s largest corporations, to the six-figure-arena for smaller entities.

And I wouldn’t look for Kmart blue light special anytime soon.

Last week, the Public Company Accounting Oversight Board approved a set of rules that basically spells out how auditors must evaluate a client’s internal controls. So, not only must an SEC company either have strong internal controls or work to get them stronger, they also must pay their independent auditors for an assessment of said controls.

I’m not an economist, but I think I understand how these things work.

If you do more work for a client, you, in essence, charge more. Which is exactly what is going to happen. Even members of the PCAOB admit that the additional work would translate into higher audit fees.

Which should come as a surprise to exactly no one who follows the profession closely. Observers have been predicting as much as a 25-30 percent rise in audit fees since the Act was passed.

Board chairman William McDonough sort of empathized with those who submitted comment letters opposing the tightened controls, but stood his official ground by saying the controls measure is “simply too important to demand anything less.”

Will this auger in a wave of audit fee price gouging by some accounting firms? Unfortunately in some cases, yes.

Although the internal control rules still await approval from the Securities and Exchange Commission, they’re a fact of life and all the ramifications that go with them.

As a former owner of a Volkswagen, I can attest to the new wave of sticker shock. But then the eventual goal is to get internal controls as reliable as a VW.

Right?

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