New York (Jan. 27, 2004) -- Seventy-five percent of project leaders from major U.S. companies experienced a significant increase in the level of effort required to comply with Sarbanes-Oxley Section 404 rules, according to a PricewaterhouseCoopers survey.
While 95 percent of executives expect their companies to meet the deadline for Section 404 compliance, about half expect it will be difficult to do so, PwC reported. Respondents also reported that their companies had the most difficulty in preparing for the 404 management assertion in three areas: the level of testing needed; the level of documentation needed; and evaluating and identifying deficiencies. The results were based on the responses of 54 project leaders who attended a Sarbanes-Oxley Conference on Section 404 compliance earlier this month.
Those surveyed said they expect to make improvements in four key areas to streamline future compliance: risk identification and assessment; financial reporting process; internal audit; and compliance management.
“There is no question that the amount of work companies must do to comply with Sarbanes-Oxley Section 404 is far more than they originally estimated,” said Lynn Edelson, head of U.S. leader systems and process assurance at PricewaterhouseCoopers. “Many thorny implementation issues remain, but there is no choice. Companies must move forward now in order to meet the compliance deadline.”
The first companies required to comply with Section 404 are those with fiscal year ends after June 15, 2004.
Other key survey findings:
- Nearly 90 percent of companies have acquired or plan to acquire new technology for SOX compliance.
- Forty-five percent of executives view the use of technology as an essential facilitator of SOX compliance.
- Over half of surveyed executives reported that SOX compliance is a necessary cost of doing business.
- Forty percent reported the perception that SOX will ultimately make them more competitive.
-- WebCPA staff
