As the Sarbanes-Oxley Act marks its second anniversary, Deloitte & Touche LLP says many public companies are struggling to meet the upcoming compliance deadline for reporting on the effectiveness of internal control over financial reporting, as required under section 404 of the law.
In a recent study released this month by the Center for Continuous Auditing at Texas A&M University shows that half of large U.S. companies polled are still less than 60 percent complete in meeting their Sarbanes-Oxley section 404 filing requirements.
Anticipating this challenge, Deloitte & Touche released Taking Control, a comprehensive guide to section 404 compliance. In preparing the publication, Deloitte & Touche drew upon thousands of hours of field work by its top practitioners in corporate governance, risk consulting, financial reporting, internal control and business ethics.
âDespite two deadline extensions by the SEC, we find that many companies are still struggling to comply with section 404,â said Steve Wagner, partner and co-chair of Deloitte & Touche's Sarbanes-Oxley Steering Committee. âBut as its name implies, Taking Control can help executives focus on gaining stewardship over their section 404 work. Readers will be able to enhance their knowledge, which could lead to a jumpstart of their efforts. Taking Control can also help provide focus to its readers on benchmarking their section 404 work progress and troubleshooting their projects.â
Taking Control discusses, in plain English, the implementation of a strong system of internal control to meet the requirements of Sarbanes-Oxley section 404. The document clearly and simply explains key concepts, dispenses practical advice, and reveals hard-won knowledge gleaned from Deloitte's extensive experience in the field.
Taking Control targets non-accelerated filers and foreign private issuers that may be just getting their work under way, as well as companies currently involved in their section 404 projects. The document will prove useful to executives and board and committee members, who will gain insights from the Executive Overview and Lessons Learned sections. Also benefiting will be those employees âon the ground,â who will find practical advice distilled from real-world experience in the Implementation Guide section.
Taking Control is part of Deloitte's family of Sarbanes-Oxley and internal control-related guidance materials. Also included in the collection are:
- A Bridge to Excellence, Deloitte's point of view on Sarbanes-Oxley compliance
- A Capital Idea, a discussion for senior management that describes how going beyond the Sarbanes-Oxley mandates can help companies turn compliance costs into business value
- Moving Forward, a guide to improving corporate governance through effective internal control
Printed copies of Taking Control and the three other publications can be obtained at no charge through local Deloitte offices throughout the United States. An electronic version of Taking Control is available on the U.S. Web site.
Source: Deloitte & Touche LLP