Tuesday, March 29, 2005
Red flags: At least 9 companies snagged by Sarbanes
The federal Sarbanes-Oxley Act is forcing public companies in Washington and around the nation to drag skeletons out of corporate closets and re-evaluate long-standing accounting practices.
After spending millions of dollars and putting in months of effort to comply with the law's Section 404, which kicks in this year, many companies are reporting serious problems with their internal controls.
At least nine public companies in Washington, ranging in size from smaller concerns like Internet security provider Watchguard Technologies Inc. to giants like Shurgard Storage Centers Inc., have reported deficiencies or "material weaknesses" in their internal controls. Even Starbucks Corp. was swept up in the fray. (See accompanying table.)
Eleven percent of public companies nationwide have reported such deficiencies or weaknesses, according to the Washington, D.C.-based CFO Executive Board, a division of business research company Corporate Executive Board.
posted by Brian Moran @ 10:53 AM