Friday, August 05, 2005
Sarbanes-Oxley boosts audit costs, turnover at the top
Three years after Congress passed a strict corporate-accountability measure designed to make it harder to defraud investors about corporate financial health, companies are experiencing higher audit fees and increased turnover among financial executives.
The Sarbanes-Oxley Act imposed new duties on corporate officials and subjected auditors to discipline from an independent panel. Analysts say the law has induced executives to pay more attention to financial data and prompted board members and accounting firms to take their work more seriously.
"Disclosure is more complete, more timely and more accurate, managers are more serious about their jobs, and boards are more active and questioning," Harvey Goldschmid, a departing Securities and Exchange Commission (SEC) member, said in an interview this week.
In recent months, business groups led by the U.S. Chamber of Commerce have stepped up pressure on the SEC to ease some of the law's requirements. Audit fees for the Fortune 1000 increased by an average of $2.3 million, or 66 percent, between 2003 and 2004, according to a study by professors at the University of Nebraska, Omaha.
posted by Brian Moran @ 2:17 PM