|  | | 2004 News and Press Releases | | |
HEADLINE NEWS:
Sarbanes-Oxley: Corporate Boon And Bane
Staff Writer
United Press International. December 29, 2004
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EXCERPT: The past year has seen U.S. corporate culture come full-circle from the dark days of Enron out into the Sarbanes-Oxley sunshine, but not without some of the growing pains that come with such a dramatic metamorphosis. The 2002 Sarbanes-Oxley Act was set up to pull down the last buffers between corporate executives and corporate financial responsibility. Now, CEOs and CFOs have to sign off on all company quarterly and yearly financial statements, directors have to come from outside the company, and companies have to do not only a comprehensive audit of their internal financial controls against fraud and other financial skullduggery, but must also have outside auditors evaluate the internal audit. Although only public companies had to tighten up their financial controls, in the post-Enron environment, even private companies adopted SOX standards to shore up their reputations. But other private firms saw the cost of compliance as an obstacle to ever going public, while some public companies said that they were strongly considering "going dark" or delisting, a survey by Chicago-based law firm Foley and Lardner LLP showed. With much grousing, companies tightened their belts, shifting money and manpower toward SOX compliance. In January, a survey by Financial Executives International showed that companies estimated they would have to spend about $2 million to comply, whereas in July, companies ramped up their estimates to more than $3 million. In the end, compliance costs ended up being on average $5.1 million, a study by recruitment firm Korn/Ferry showed. |
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