Companies will pay less for audits of their internal controls in the second year the audits are required, a study for the world's four top accounting firms said yesterday.
The study said the cost of complying with Section 404 of the Sarbanes-Oxley Act of 2002 would decline 42 percent to an average of $4.3 million for large companies, and fall 39 percent, to $900,000, for smallercompanies in the provision's second year. Section 404 requires that executives assess a company's internal controls in annual reports, and that auditors attest to the assessment.
The Securities and Exchange Commission is reviewing whether to ease or eliminate the requirements, especially for smaller companies, which have complained about the cost. In a letter to the chairman of the S.E.C., Christopher Cox, which was released with the report, the four accounting firms defended the provisions as written.
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