CFOs are burning the midnight oil a little more these days as they work longer and harder to ensure their companies meet the requirements of Sarbanes-Oxley, according to an article this month on CFO.com. The article discusses the increased workload CFO’s face as they certify financial statements and verify the adequacy of internal control systems, as mandated by the new legislation.
Since the enactment of Sarbanes-Oxley, CFOs are working an average of three more hours a week. Much of that additional work time is focused on monitoring, testing, and improving internal controls. A survey by Parson Consulting shows that 66 percent of finance chiefs are spending more time on risk assessment than they were in the past.
But that’s not the only burden that Sarbanes-Oxley has created for finance executives. Many CFOs are drowning in paperwork, especially before quarterly close, when company managers and controllers send in dozens or hundreds of representation letters, which are part of the upstream chain that eventually leads to the CFO’s certification of financial statements.
To meet these increased work demands, some CFOs have expanded their staff by hiring new employees, while others are using the services of outside accounting firms. Either way, the CFO is still taking the ultimate responsibility, a perilous position for a job that has always carried risks.
Sarbanes-Oxley has also served to strain the relationship between CFOs and external auditors. An example of this was the firing of Kirk Gorman, CFO of Universal Health Services, in February, as reported by AccountingWEB. KPMG, the company’s auditor, requested that Mr. Gorman be let go when he wrote a letter to the accounting firm asking them to provide assurances regarding their ongoing review of the company’s financial statements and disclosures.