Eight Years Post-SOX, Ajilon/IMA Survey Shows SOX 404 Compliance Process Still has Room for Improvement
73% of accountants say their company could be more efficient in implementation of SOX 404; June 2010 compliance deadline for small companies fast approaching
Melville, NY – (January 6, 2010) – It has been almost eight years since the passage of the Sarbanes-Oxley Act (“SOX”), yet companies still report inefficiencies in their implementation of internal accounting controls, according to a new survey by Ajilon Finance Solutions, a leading provider of senior level financial and operations expertise. The survey polled 210 accountants in conjunction with the Institute of Management Accountants’ Inside Talk Webinar Series. It revealed that 73 percent of finance professionals believe their company could be more efficient in the implementation of Section 404(b) of the Sarbanes-Oxley Act, one of the most contentious and costly aspects of SOX requiring management and external auditors to report on the adequacy of the company's internal control over financial reporting.
The inefficiencies that respondents cited in the survey included:
- Poor training and education in the area of processes and controls
- Lack of focus in project management and utilizing resources
- “Compliance at all costs” mentality that is focused on effectiveness but not efficiency
Thirty-five percent of accountants in the survey said their company is less than 25 percent complete in the implementation of SOX 404. On the positive side, 34 percent of respondents said their company is nearly 100 percent complete with the compliance process.
“With the June 2010 SOX 404 compliance deadline for small public companies fast approaching, businesses need to take steps now to ensure they are prepared. This includes everything from a proper risk assessment, documenting Internal Controls to evaluating IT controls in existing and future systems,” said Angela Roberts, practice director, Ajilon Finance Solutions. “At Ajilon we’re working closely with small companies now to ensure they understand the regulations and can avoid and learn from the pitfalls of earlier efforts.”