The general opinion now is that, as well as identifying efficiencies during the second year under the new laws, the higher costs first time around were also attributable to many mistakes made by companies trying to implement the new rules. UK companies could do well to learn from this, according to Dawn Cresswell, part of UHY Hacker Young’s Sarbox advisory team.

From 15 July, UK companies with a listing in the US will also have to face the same tough rules on internal controls. But as Cresswell said: ‘UK companies have the advantage of being able to see what mistakes have been made in the US and making sure they don’t make the same ones.

‘US companies found they had misallocated a lot of their time and money in trying to achieve the first year of Sarbox compliance. They have now learnt from these mistakes and the dramatic reduction in costs in the second year reflects a more considered approach.’

This view is backed by a recent report from consultants CRA International. Using data from Big Four clients, it found that audit costs for section 404 compliance among a sample of Fortune 1000 companies had dropped 44% on the previous year to an average of $4.8m (£2.7m).