The number of public companies that disclosed material weaknesses or significant deficiencies in internal controls during the month of November soared to 119, nearly double the 63 reported in October, according to a report by corporate governance and compliance newsletter Compliance Week.

That number, which is more than 10 times the number reported during the same month in 2003, when 11 companies disclosed weaknesses, brings the total number of weakness and deficiency disclosures year-to-date to 526, CW reported.

CW said that the increase was largely due to the volume of companies filing quarterly reports. For many companies, those reports marked their final 10-Qs before Sarbanes-Oxley Section 404 internal control assessments are due.

Roughly half of the November weakness and deficiency disclosures (49 percent) involved the company's financial systems and procedures. Typically, these problems are related to the financial close process, account reconciliation, or inventory processes, according to Compliance Week.

Twenty-six percent of the disclosures were related to personnel issues; typically cited were poor segregation of duties, inadequate staffing, and related training or supervision problems. Disclosures related to revenue recognition, documentation, and IT systems and controls each accounted for 5 percent of disclosures.

In addition, several companies warned of "potential" significant deficiencies, or potential problems with specific controls, while others disclosed that they had identified deficiencies, but the problems weren't described specifically as "significant deficiencies." CW also said that several companies disclosed that their outside auditor warned them that there might not be enough time to meet the 404 deadline.

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