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Sarbanes-Oxley Becomes `Open Checkbook’ for KPMG, Ernst & Young

Sarbanes-Oxley Becomes `Open Checkbook’ for KPMG, Ernst & Young

by Rick Turoczy on November 4, 2004

Micros Systems Inc. is awash in accountants. Eleven auditors from PricewaterhouseCoopers LLP are scouring its books and 10 consultants from Deloitte & Touche LLP are examining its financial controls as the company tries to meet new federal rules by a Nov. 15 deadline.

The Columbia, Maryland-based maker of restaurant computer networks will spend as much as $4 million over two years to comply with the Sarbanes-Oxley Act of 2002. That’s almost triple Micros Systems’ original estimate and equal to 12 percent of its fiscal 2004 profit, says controller Cindy Russo.

Congress passed Sarbanes-Oxley to tighten financial reporting at public companies and police outside auditors after accounting fraud caused the collapse of Enron Corp. in 2001 and WorldCom Inc. in 2002. The law has become a windfall for accounting firms that failed to stop the fraud and that fought passage of the bill. Audit bills have risen 50 percent in two years, according to the newsletter Public Accounting Report.

“It’s an open checkbook,” says Russo, 34. “It’s a tremendous hit to our bottom line.”

Sarbanes-Oxley Becomes `Open Checkbook’ for KPMG, Ernst & Young

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