A recent report identified two trends among companies that report material weaknesses -- skyrocketing audit fees and disappearing chief financial officers.

According to a study by consulting firm A.R.C. Morgan of 350 Securities and Exchange Commission-registered companies that disclosed material weaknesses, more than 60 percent of CFOs from companies with weaknesses leave or are pushed out either immediately before or within three months of the disclosure.

The study, "Using Reported Weakness Disclosures to Benchmark Internal Controls," also found that auditor fees soar when a weakness is found, typically by 150 percent, compared to between 30 and 50 percent for companies with no weaknesses reported.

According to ARC Morgan, more than 390 companies have disclosed weaknesses in 2004, and over 86 percent of the disclosures so far appear to have been discovered by the external auditors and not by management (or consultants) as part of their compliance projects

In addition, more than 65 percent of filers with disclosed weaknesses restate earnings, according to the report.

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