From Euromoney Online:
Execs Lose Faith In Sarbox
Jul-22-2008 | Source: Compliance Reporter
Company executives are taking an increasingly dim view of some effects of Sarbanes-Oxley. According to new research by IT firm Oversight Systems, just 10% of officials think that complying with SOX has strengthened investors’ views of their company, down from 20% four years ago. Similarly, fewer (29% compared with 33%) respondents believe that compliance has reduced the risk of financial fraud. The firm interviewed roughly 100 CFOs, audit chiefs, controllers and internal auditors in May and June.
By contrast, SOX has won increasingly glowing reviews among executives for its impact on financial reporting. More than two-thirds (69%) of respondents said compliance has ensured accountability of those involved in financial reports and operations, up from 46% in 2004. Almost half (45%) said the law has improved the accuracy of their financial reports, a marked rise from 27% four years ago.
Cutting compliance costs was still the top SOX-related goal, despite 80% stating that their costs were the same or lower than in previous years. Dana Hermanson of the Coles College of Business at Kennesaw State University told CR that the shifts in attitude can be attributed at least in part to the increasing distance from the last major accounting scandals and to budget pressures in a tough economic climate. “It’s a classic problem… [Compliance] costs are easy to measure; the benefits are very hard to measure.”
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