Most Companies Working on Sarbanes-Oxley

META Group survey shows SOX projects underway or planned at 90 percent of companies

META Group survey shows SOX projects underway or planned at 90 percent of companies

Stamford, CT  August 29, 2003  Fully 90 percent of companies in a recent survey are either working on or planning imminent projects to comply with the reporting requirements of the Sarbanes-Oxley (SOX) Act, according to a recent survey by technology consultancy META Group.

Sixty-five percent of companies in the survey of 100 companies said they are actively involved in an ongoing project to comply with SOX, while 25 percent said they are planning to initiate a project in the near term, according to a META Group survey.

The researchers found that while SOX is the major lightning rod for compliance initiatives in the United States, along with HIPAA and the USA PATRIOT Act, 88 percent of respondents from multinational firms claim SOX projects are managed as global initiatives.

"Because of the required high level of preparation on a global scale, many firms will utilize SOX as a means of improving business efficiency, going beyond what is merely required to comply," said John Van Decker, META Group's lead Sarbanes-Oxley compliance analyst and author of the survey. "We expect company leaders to initiate projects that deploy applications providing visibility/transparency, financial controls and communications and fraud protection."

According to 45 percent of surveyed respondents, chief financial officers (CFOs) are the most likely leaders to initiate SOX projects, due to their focus on financial management. Internal auditors ranked a distant second (24 percent of respondents). However, an overwhelming majority favors their audit partner for compliance work (59 percent), and this is contrary to META Group's recommendation that a third party be used.

"While [using an audit partner] may make the audit attestation process smoother, it limits the multiple views and guidance that may prove invaluable for a relatively new and untested regulatory environment," said Van Decker. "Only 6 percent project that they will use a different audit vendor, and only 3 percent will employ a specialty compliance vendor."

META Group also cautions the 29 percent of companies that believe they can do this on their own, again pointing to the relatively untested regulatory environment and the lack of experienced resources (actually none) internally.

For more information on Sarbanes-Oxley, read Parts 1 and 2 of the recent iSourceonline series on Contract Management: Five Myths of Contract Management, and Contract Management: Improving Corporate Governance.

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