Sarbanes-Oxley disclosures on management assessment of internal controls over financial reporting are indicating some worrying trends, according to a new report.

The report, from the research firm Audit Analytics, found that while the number of adverse disclosures under Section 404 of the Sarbanes-Oxley Act dropped in fiscal year 2015 to 202 disclosures, compared to 228 for fiscal year 2014, the total for 2015 was nonetheless the second highest in the last seven years.

Sarbanes-Oxley requires the management of public companies to establish internal controls over financial reporting, and to document, test and maintain the procedures for those internal controls. Large companies, known as accelerated filers, must also have those procedures audited by public accounting firms. However, smaller companies, known as non-accelerated filers, only need to file a management assessment of a company's internal controls over financial reporting, and are not required to file an audit attestation on top of that. When looking into these filings, Audi Analytics found the number of Management-Only assessments declined to 1,246 for fiscal year 2015.

Meanwhile, the percentage of adverse Management-Only assessments showed a seven year trend of increases, reaching a high of 40.48 percent for fiscal year 2014. The percentage for fiscal year 2015, of 36.07 percent, represents a decrease from FY 2014, which was higher than 2011 and the three years prior.

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