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Compliance: Sarbanes-Oxley Guidance expected in December

first_imgSince Sarbanes-Oxley (SOX) regulations were passed after the Enron scandal, businesses, particularly those small and medium sized, have complained about Section 404 which they have viewed as being onerous to comply with.  The problem has been with the language of the ruling.  The vagueness of the SOX language has made many accountants and auditors interpret the law very conservatively.  Accountants and auditors are often worried that they could be sued by the SEC or investors if fraud is discovered at a later date.The result has been that companies fees for auditing and accounting have soared.  An AMR report shows that costs related to SOX have increased from $2.5 billion in 2002 to $6.1 billion in 2005.For companies targeting SOX with products, services and consulting, this has been good news.  Many software vendors have targeted the problem with specialized software.  Companies addressing the problem include IBM, Oracle, SAP AG and Microsoft.  The Big Four accounting firms have also benefited.Proposed guidance for SOX compliance from the SEC is expected in December.  The Wall Street Journal this weekend reported that the new language will relax requirements of Section 404 compliance.  In the long-term that is likely to save companies money and provide them with confidence that their procedures are compliant.  But in the short-term it may mean that recently implemented processes for achieving compliance will again need to be reviewed, changed and updated.last_img

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