Sarbox resolve flagging

Audit and financial managers at leading companies have serious concerns about sustaining Sarbanes-Oxley compliance procedures, a survey of 247 audit professionals at corporations with more than $1bn (£548m) in revenue has revealed.

The study, by US research body the Center for Continuous Auditing and ACL Services, found that 95% of respondents said Sarbanes-Oxley procedures could not be sustained if the costs and staff time required for compliance were not reduced.

Companies have each spent an estimated $3.14m complying with Sarbanes-Oxley during the first year that the governance rules came into effect, and indications are that compliance costs could remain high as companies have yet to achieve the efficiencies that will reduce costs.

The survey discovered that only 40% of the businesses planned to automate the testing of their controls, leaving over half of the respondents with the ongoing battle of finding skilled labour to test the numerous controls within organisations. Less than half of those polled, meanwhile, expected a decrease in the resources spent on testing controls for Sarbanes-Oxley purposes.

David Walker, chairman of the CCA advisory board, said if corporations did not continually improve systems and make use of technology, Sarbanes-Oxley compliance would remain onerous and expensive.

‘Until there is mainstream adoption of these best practices, companies will continue to experience challenges managing their compliance processes,’ Walker said.

‘Technologies that automate and monitor controls on an ongoing basis will be critical for achieving true success in the future.’