Executives Less Favorable to Sarbanes-Oxley One Year Later
PricewaterhouseCooper’s (PwC)’s "Management Barometer"  reported that just 30 percent of the executives surveyed would give Sarbanes-Oxley a favorable rating, which is down from 42 percent in October. However, 91 percent of those surveyed conceded their company has made control and compliance changes mandated by the legislation, passed to put more responsibility on executives, improve transparency and bolster public trust.
The survey found that 35 percent believe there will be a marked improvement in investor confidence as a result of the reforms, which is up slightly from 31 percent in October. Yet half still think the law will have little or no effect on investor confidence levels. Just 68 percent think their entire company is in compliance with Sarbanes-Oxley, down from 82 percent last October.
"Sarbanes-Oxley has proven to be far more complex and has required companies to make many more changes in control and compliance than executives originally thought," said Ellen Masterson, global leader of audit methodology for PwC. "Consequently, more business leaders are now uncertain that their company is doing everything it should to be in compliance."
Most—nearly half in fact—are finding the cost of compliance to be prohibitive. "The number of senior executives describing Sarbanes-Oxley compliance as costly has nearly doubled from October to June," noted Masterson. "And now, 85 percent expect higher long-term costs of compliance."
Executives also reported concerns about increased risk for their audit committees and others who must now provide sub-certifications.
"Certification-related risks, and the growing number of executives who must now sign off have clearly contributed to the sense of discomfort with Sarbanes-Oxley regulations at the top," said Masterson. "The increased risk has caused many companies to schedule more-frequent meetings of their audit committee, to devote more time to the issues of audit risks and quality."
PricewaterhouseCoopers' "Management Barometer" is published quarterly. For additional information, contact Mike Ascolese, 201-521-4322; E-mail: firstname.lastname@example.org