RegulationCorporate GovernanceSarbox resolve flagging

Sarbox resolve flagging

There are serious concerns among audit and financial managers at leading companies about sustaining Sarbanes-Oxley compliance procedures

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.’

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