SOX compliant—But not safe!

✍ Scribed by Michael Davis; Gordon E. Smith; Chris Schroeder

• Book ID: 102296959
• Publisher: John Wiley and Sons
• Year: 2006
• Tongue: English
• Weight: 81 KB
• Volume: 17
• Category: Article
• ISSN: 1044-8136
• DOI: 10.1002/jcaf.20248

✦ Synopsis

Y

ear Two of the Sarbanes-Oxley Act (SOX) implementation process is under way. During Year One, many companies struggled to fulfill the requirements of SOX Section 404 to evaluate their internal controls. Not only was specific guidance sketchy, but outside auditors were also unwilling to help-or even advise-the companies, fearing that involvement would impact their independence. As a result, companies incurred enormous increases in internal audit time and costs. Moreover, because the new rules do not allow outside auditors to rely on company tests and evaluation of their internal controls, audit fees ballooned as auditors retested and redocumented work the company also performed. According to a report by the Big Four accounting firms of SOX audit costs for Fortune 1000 companies, the