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One CFO says section 404 of Sarbanes-Oxley put a stressed out employee in the hospital. A teleconference Wednesday marks the last chance for small companies to air such complaints.
Helen Shaw, CFO.com | US
April 10, 2006
I agree with Charlie, David and John. The percentage of individuals engaged in business that truly understand financial reporting is probably very small. They make mistakes or are open to fraud perpetrated by ethics deficient "experts". The market crashes, the public is shorn and their savings harvested.Every one engaged in business should understand these financial reports and their personal responsibility to ensure reporting accuracy. Jessica Wall-Byrnes
Posted by Jessica Wall-Byrnes | April 13, 2006 08:34 pm
I have read a number of articles on the challenges management of companies have faced in implemenation of SOX 404. A common theme is the excessive cost. As an investor, I am very happy to pay for something that is going to provide me with insight on significant weaknesses and I suspect if this question is posed to their shareholders, they too may have the same view. My question to management then is if there is overwelming support from the investment community for this type of legislation, and shareholders are willing to absorb the cost, why the resistance to it?
Posted by John Ferrari | April 12, 2006 09:34 am
Shakespeare would have loved the SOX market. Everyone is a victim in terms of cost/liability (Filer, Audit Firm, Investor, etc) and yet everyone is also a benefactor in terms of improved processes/client billings/information. The good stuff always cuts both ways. An intersting trend is emerging that some observers may have missed.While the initial impetus to SOX and financial restatements may have been some questionable ethics and financial engineering techniques at big name companies, it looks like what is emerging is a significant gap in the understanding, application and disciplined procedural execution of accounting standards across a significant minority of publicly traded firms. The reality is that reporting on the results of a publicly traded company is complex and detailed. Isn't it time we "upped" our accuracy, financial hygiene and standards? Don't we owe it to investors and their faith in the market?
Posted by Charley Best | April 11, 2006 02:19 pm
I was greatly disturbed to hear about the company where the stress to meet compliance resulted in an employee going to hospital. However, SOX compliance should not take this type of toll on your organization. Rather, SOX should be an opportunity to improve the organization. Further, the costs of compliance with Sox, while expensive, should be recouped in organizational efficiency and enabling the organization to respond more quickly to market opportunities. If you are looking at ways to control costs, look at second and third tier consulting firms who can deliver results which equal or surpass the big four - yet at a price tag which can be significantly less than the big four.
Posted by David Mertz | April 10, 2006 06:33 pm
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