Admissions of material weaknesses in internal controls have declined in the filings of large U.S. companies in the past two years, showing the positive effects of Sarbanes-Oxley compliance, according to a newly released analysis.
Compliance Week examined the annual reports of 426 of the S&P 500 companies that provided such disclosures and found that only 14 weaknesses were reported by 11 companies in 2008. In contrast, when the same publication looked at more than 400 randomly selected large companies in 2006, almost every company reported at least one material weakness in internal controls, and the group as a whole reported more than 800.
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