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Sarbanes-Oxley Exposes Missteps as Audit Costs Spur Gripes

Sarbanes-Oxley Exposes Missteps as Audit Costs Spur Gripes

by Rick Turoczy on April 13, 2005

Yellow Roadway Corp. says it spent almost $10 million last year in a dash to meet new federal audit rules. The biggest U.S. trucker hired 10 employees, added another 20 consultants and had to write new software. Fees to its auditor more than doubled to $4 million. For its effort to meet the mandates of the 2002 Sarbanes- Oxley Act, Yellow Roadway got a clean bill of health from its auditor, KPMG LLP. Others were less fortunate. Auditors required more than 360 large companies to declare “weaknesses” in their financial controls, and as a result 400 companies filed annual reports late. Average audit fees for the 100 largest U.S. companies last year jumped 45 percent to $13 million.

Congress probably won’t change Sarbanes-Oxley. Instead, when executives gather today at a U.S. Securities and Exchange Commission hearing on the law, they’ll take aim at the implementing regulations they say are causing an excessive burden in money, time and stress. They may also target their accountants.

“There were benefits, but the benefits were greatly exceeded by the costs of the law,” says Donald Barger Jr., 62, chief financial officer at Yellow Roadway, based in Overland Park, Kansas. “These costs have to be cut.”

Sarbanes-Oxley Exposes Missteps as Audit Costs Spur Gripes

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