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Sticker Shock

(continued)

Not Adding Up
How realistic are the following cost assumptions made by the SEC? Note: Numbers may not add up to 100%, due to rounding.

1) External legal and audit fees run an average of $300 per hour.
Very low
3%
Low
24%
Accurate
56%
High
16%
Very high
1%
2) Internal professional staff costs are $125 per hour.
Very low
2%
Low
13%
Accurate
47%
High
33%
Very high
5%
3) Complying with Reg G (reconciling pro forma to reported earnings) can be accomplished by an in-house junior accountant in about 30 minutes per filing, at a cost of $13 including overhead.
Very low
50%
Low
39%
Accurate
11%
High0%
Very high0%
4) Disclosure associated with off-balance sheet arrangements costs $10,000, including in-house staff time and outside professional fees.
Very low
15%
Low
45%
Accurate
33%
High
5%
Very high
2%
5) Additional disclosure associated with nonaudit fees and changes in practices to promote auditor independence takes about two hours, half a page of a proxy and/or 10-K, and costs about $418 per filing, including internal and external staff fees.
Very low
23%
Low
53%
Accurate
23%
High
2%
Very high0%
6) The average annual cost of implementing Section 404 is around $91,000 per company.
Very low
23%
Low
53%
Accurate
13%
High
6%
Very high0%




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