The Hidden Costs of Sarbanes-Oxley: Employee Morale

Consultants. Rising audit fees. Dozens of new internal auditors. Executive meetings. Revenue-generating projects put on hold. The tangible costs of Sarbanes-Oxley (SOX) compliance hit almost every public company in the United States and will soon reach many more around the globe.

While executives seek to drive down these substantial compliance costs, another expense of SOX compliance continues to rise: employee morale and job dissatisfaction.

Nearly half of financial executives feel the biggest issue related to SOX compliance is the need to maintain the morale of the employees responsible for compliance, according to the 2005 Oversight Systems Financial Executive Report on Sarbanes-Oxley. (Reducing internal and external costs ranks as the second most frequently cited challenge to ongoing compliance.)

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