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Sarbanes-Oxley and the Cost of Compliance

Sarbanes-Oxley and the Cost of Compliance

by Rick Turoczy on February 28, 2006

According to a press release accompanying the study, SIA found that the cost of compliance for securities firms (e.g., broker-dealers) has risen rapidly, nearly doubling in the past three years – reaching an estimated annual total of more than $25 billion in 2005, up from $13 billion in 2002. SIA states the opportunity costs (which are not as readily quantifiable) could be even greater. Additionally, SIA states that the overwhelming bulk of total compliance costs of securities firms in their survey were found to be staffing-related.

The Sarbanes-Oxley Act (particularly Section 404) was among the “most burdensome” legislative/regulatory initiatives cited by securities firms, as noted in the summary of the SIA survey report.

Sarbanes-Oxley and the Cost of Compliance

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