July 15 is coming fast: That’s the deadline for many companies to comply with Section 404 of the Sarbanes-Oxley Act, which guides how auditors report on companies’ assessments of their internal controls. To comply with 404, companies with less than $2 billion in revenues have spent an average of $3 million to $3.2 million on internal and external fees, according to a new report.

Consultancy A.R.C. Morgan analyzed Section 404 implementation costs reported in public filings and press releases by about 280 companies, 87 percent of which have annual revenues of less than $2 billion. Many more companies, reported the consultancy — especially large companies with more than $10 billion in annual revenues — acknowledge that 404 is burdensome but are not revealing their costs of compliance.

The majority of costs that are disclosed relate to costs for external consultants and professional advisers, added A.R.C. Morgan, “probably because companies found these costs easier to measure than internal resource costs.”

Companies with less than $2 billion in annual revenues incurred average implementation costs of $1.8 million for external resources, according to the report; companies with $7 billion to $10 billion in revenues spent an average of $10 million.

A.R.C. Morgan also noted that most of the disclosed costs were incurred in the second half of 2004, and that two-thirds of costs on external resources were incurred in the last quarter.