November 15, 2005 marks the one year anniversary for compliance with Section 404 of the Sarbanes-Oxley Act which requires internal controls over the creation of financial reports.
In the past year or more, companies have approached compliance with Section 404 as a project, but have not leveraged this to improve business efficiencies, reduce risk and improve effectiveness. In many cases, companies have implemented manual methods, which have led to significant costs.
SOX compliance overall is costing businesses millions of dollars. A March 2005 survey by Financial Executives International shows that first year SOX 404 compliance costs averaged $4.36 million per company, and large companies with more than $5 billion in revenues spent more than $10 millions per company.
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