While companies want to reduce compliance costs related to The Sarbanes-Oxley Act of 2002 (SOX), specifically Section 404 of the Act, Year Two for most accelerated filers is shaping up to be a year of incremental improvement.
We expect this self-examination to increase the efficiency and reduce the cost of testing. However, it will not drive substantive improvements in the financial reporting process and in the underlying control environment. Our fear is that companies will end up designing their compliance process around an already high-cost internal control structure. This issue of The Bulletin focuses on some of the opportunities companies should consider as they plan for Year Three of Section 404 compliance.