Companies must focus on making compliance repeatable, sustainable and cost-effective, analyst says
Boston — December 5, 2005 — Companies will spend $6 billion on complying with Sarbanes-Oxley Act (SOX) requirements in 2006, on par with the $6.1 billion that will be spent in 2005, according to a new survey by technology consultancy AMR Research.
These findings are based on a recent study conducted by AMR in which over 300 business and IT leaders were surveyed on their Sarbanes-Oxley and broad compliance spending priorities.
In 2006, there will be key differences in how budgets are spent, according to AMR. Budgets allocated to internal headcount are expected to fall by 8 percent, while the technology allocation will grow by more than 13 percent in real dollars over 2005 numbers. External consulting activities, which do not include audit fees, are expected to hold steady in 2006. Overall, AMR expects SOX-related spending to break down as follows:
"These spending predications support a long-term approach to SOX compliance," said John Hagerty, vice president of research at AMR Research. "Budgets are shifting from headcount to technology so that compliance can become repeatable, sustainable and cost-effective."
AMR Research also found the following about companies complying with SOX:
Additional Articles of Interest
— It's time to take Sarbanes-Oxley compliance to the next level for competitive advantage. Read more in "Sarbox: Setting a Better Organization in Motion," an SDCExec.com exclusive.
— For more information on Sarbanes-Oxley, read Parts 1 and 2 of the recent SDCExec.com series on Contract Management: Five Myths of Contract Management, and Contract Management: Improving Corporate Governance.
— SAS audits can help ensure that your supply base doesn't trip up your Sarbanes-Oxley compliance. Read about SAS audits in "Supplier Compliance: The Responsibility Lies with You," the Final Thoughts column the October/November 2005 issue of Supply and Demand Chain Executive.
Boston — December 5, 2005 — Companies will spend $6 billion on complying with Sarbanes-Oxley Act (SOX) requirements in 2006, on par with the $6.1 billion that will be spent in 2005, according to a new survey by technology consultancy AMR Research.
These findings are based on a recent study conducted by AMR in which over 300 business and IT leaders were surveyed on their Sarbanes-Oxley and broad compliance spending priorities.
In 2006, there will be key differences in how budgets are spent, according to AMR. Budgets allocated to internal headcount are expected to fall by 8 percent, while the technology allocation will grow by more than 13 percent in real dollars over 2005 numbers. External consulting activities, which do not include audit fees, are expected to hold steady in 2006. Overall, AMR expects SOX-related spending to break down as follows:
- $2.3 billion (39 percent) - Internal labor / headcount
- $1.9 billion (32 percent) - Technology
- $1.8 billion (29 percent) External consulting
"These spending predications support a long-term approach to SOX compliance," said John Hagerty, vice president of research at AMR Research. "Budgets are shifting from headcount to technology so that compliance can become repeatable, sustainable and cost-effective."
AMR Research also found the following about companies complying with SOX:
- 39 percent of companies currently have an operational SOX solution, while 37 percent are implementing one in 2005. Even so, over 80 percent of companies plan to add to or improve on what they have in place in 2006.
- 40 percent of companies have a specific budget for SOX compliance; the remainder fund efforts from existing operations.
- None of the companies surveyed have spent less than anticipated.
Additional Articles of Interest
— It's time to take Sarbanes-Oxley compliance to the next level for competitive advantage. Read more in "Sarbox: Setting a Better Organization in Motion," an SDCExec.com exclusive.
— For more information on Sarbanes-Oxley, read Parts 1 and 2 of the recent SDCExec.com series on Contract Management: Five Myths of Contract Management, and Contract Management: Improving Corporate Governance.
— SAS audits can help ensure that your supply base doesn't trip up your Sarbanes-Oxley compliance. Read about SAS audits in "Supplier Compliance: The Responsibility Lies with You," the Final Thoughts column the October/November 2005 issue of Supply and Demand Chain Executive.
- More research from AMR Research.
