Friday, May 09, 2008

SOX Compliance Workload Shrinking

It's hardly news that corporate America becomes more adept at SOX compliance with each passing year. Still, a recent survey report from Financial Executives International fleshes out the trend with several interesting statistics. They show that internal and external person-hours and total audit fees continued to decline last year, even as auditors hiked their fee rates 5 percent on average.

Among last year's compliance workload and cost figures:

- Companies reported requiring an average of 11,100 people hours internally to comply with Section 404 in 2007, representing a decrease of 8.6 percent from the previous year.

- Companies reported requiring an average of 1,244 external people hours to comply with Section 404 in 2007, representing a decrease of 13.7 percent from the prior year of compliance.

- Auditor attestation fees paid by accelerated filers in 2007 constituted 23.7 percent of the accelerated filer's total annual audit fees and averaged $846,000, representing a 5.4 percent decrease from 2006.

Summarizing the findings, Michael P. Cangemi, the organization's president and chief executive, said:
As companies continue to find efficiencies in complying with Section 404 and make compliance part of a routine practice, we have seen a continued decline in costs. While 404 auditor costs also declined 5.4 percent as the auditor scope of work narrowed, these costs were offset by a reported 5 percent increase in the average hourly audit rate charged by auditors.

FEI Survey: Average 2007 SOX Compliance Cost $1.7 Million [Press release]

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