Has risk management ever been more of a “headline” issue for organizations than it is today? A string of devastating natural and man-made disasters worldwide coupled with continuing aftereffects of a challenging global financial crisis have placed companies in the spotlight of shareholders, governments and the public; all of whom want assurances that companies understand and are managing their risks effectively.
Of course, these issues are just the latest in a decade-long movement to enhance risk management in public companies; a trend that began in 2002 with the passage of the Sarbanes-Oxley Act. That legislation, and in particular Section 404, placed new requirements on companies to establish strong and sound internal control over financial reporting. Not only did it require management to report on the effectiveness of these controls, but also required attestation by the company’s external auditor. For management and the board of directors at publicly held organizations, a new level of risk management and internal control was required to address financial reporting risk, and remains so nine years later.
This risk, and how companies are addressing and managing it while seeking to streamline their control environments and the time and cost associated with Sarbanes-Oxley compliance, is the focus of Protiviti’s annual Sarbanes-Oxley Compliance Survey.
As is evident in this year’s results, the news is becoming better for many organizations. Without question, the initial years of compliance result in high costs for companies in terms of time, money and other resources. And for some, Sarbanes-Oxley compliance remains an expensive line item in the annual budget, even after many years of experience and refinement. Overall, however, costs tend to stabilize and even fall after the initial compliance years. More organizations find that the benefits – including a stronger internal control environment and improved effectiveness and efficiency in operations – outweigh the costs.
Protiviti’s Sarbanes-Oxley Compliance Survey takes an in-depth look at these issues along with the strategies and tactics that will help organizations benchmark their compliance processes with regard to cost, time and effort; maximize the many benefits of those processes; and achieve a desired state of verifiable compliance, value-add and sustainability. This year’s survey also includes two new sections that focus on the impact of economic events in 2009 and the exemption of Nonaccelerated Filers from Section 404(b) compliance (the auditor attestation requirement) as dictated in the Dodd-Frank Wall Street Reform and Consumer Protection Act passed in July, 2010.
The over 400 participants in this year’s Sarbanes-Oxley Compliance Survey included chief audit executives, chief financial officers, corporate Sarbanes-Oxley leaders, audit directors and managers, and corporate controllers, among many other executives and professionals involved with and having a stake in the financial reporting process. Respondents represented a broad array of industries, the most prevalent of which include manufacturing, financial services, technology, retail, energy, utility and healthcare, among others.
Download the entire report:
2011 Sarbanes-Oxley Compliance Poll