FLORHAM PARK, N.J., May 30 /PRNewswire/ -- Complying with Section 404 of
the Sarbanes-Oxley Act will cost public companies an average of 35% more in
audit fees, according to a recent survey of companies by Financial Executives
International (FEI). FEI is the leading professional organization serving
Chief Financial Officers (CFOs) and other senior financial executives.
Complete results of the survey are available at the FEI web site:
http://www.fei.org/news/404CostSurvey.xls.
During the week of May 19-23, FEI surveyed 83 of its members at public
companies with average revenues of $3.3 billion. Fifty of the members
surveyed represented companies listed on the New York Stock Exchange, with the
remaining companies trading on either NASDAQ or the American Stock Exchange.
Looking to the man-hours needed to be Section 404-compliant, responses
ranged widely, from 80 hours to 65,000 hours. On average, public companies
expect to spend more than 6,000 hours (including internal resources, external
resources and attestation time) and an additional $480,000 in software and IT
consulting on Section 404 compliance.
"Strong internal controls are a hallmark of a well-managed company and an
essential component of a sound corporate governance structure within the
company," said Colleen Sayther, President and CEO of FEI. "Hopefully, the
documentation required by Section 404 leads to stronger internal control
systems across companies, and not inefficient use of corporate resources."
Section 404 of Sarbanes-Oxley requires each annual report of a company to
contain (1) a statement of management's responsibility for establishing and
maintaining an adequate internal control structure and procedures for
financial reporting; and (2) management's assessment, as of the end of the
company's most recent fiscal year, of the effectiveness of the company's
internal control structure and procedures for financial reporting. Section 404
also requires the company's auditor to attest to and report on management's
assessment of the effectiveness of the company's internal controls and
procedures for financial reporting, in accordance with standards established
by the Public Company Accounting Oversight Board (PCAOB).
About FEI
Financial Executives International (FEI) is the leading advocate for the
views of corporate financial management. Its 15,000 members hold
policy-making positions as chief financial officers, treasurers, and
controllers. FEI enhances member professional development through peer
networking, career planning services, conferences, publications, and special
reports and research. Members participate in the activities of 86 chapters,
75 of which are in the United States and 11 in Canada. For more information
about FEI, visit http://www.fei.org.
Scott Sunshine/Ed Sweeney Chris Allen
TowersGroup FEI
(212) 354-5020 (973) 765-1058
scottsunshine@towerspr.com callen@fei.org
edwardsweeney@towerspr.com
SOURCE Financial Executives International
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Related links:
http://www.fei.org
CONTACT:
Scott Sunshine, scottsunshine@towerspr.com,
or Ed Sweeney, edwardsweeney@towerspr.com, both of TowersGroup,
+1-212-354-5020, for FEI; or Chris Allen of FEI, +1-973-765-1058,
callen@fei.org
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