A new study reveals that Sarbanes-Oxley (SOX) implementation costs fell by some 44 percent in 2005, even with Section 404 requirements. Bloomberg reports costs dropped to an average cost of $4.8 million for the largest publicly traded companies. CRA International predicted the decrease would go to 42 percent.

CRA International facilitated the Spring 2006 Survey for the Big Four accounting firms in order to capture year-two implementation costs and cost drivers and audit fees reported in corporate proxy documents and financial statements. The New York Times reported that CRA International also completed the Big Four’s Fall 2005 Survey.

“This is the second year with Sarbanes-Oxley, so there were significant efficiencies from doing it a second time,” said Gregory Bell, a group vice president at CRA International. He went on to say that larger companies spent more on SOX compliance because they had higher non-repeating costs, according to Bloomberg.

Smaller companies didn’t see the 44 percent drop off in SOX costs but saw their costs drop 31 percent instead, to an average cost of $860,000, according to Bloomberg. These were companies with market capitalizations ranging from $75 million to $700 million. CRA International predicted that smaller company costs would decrease 39 percent. The larger companies cited in the study had capitalizations greater than $700 million.

The complete Spring 2006 Survey is available for your review. CRA International’s complete Fall 2005 Survey is also available for your review here http://www.crai.com/pubs/pub_4896.pdf.