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Learning to live with Section 404 of Sarbanes-Oxley

Learning to live with Section 404 of Sarbanes-Oxley

by Rick Turoczy on April 23, 2006

Everyone, it seems, applauds honesty and openness. Provided, of course, it doesn’t cost too much money.

For supporters and critics of the landmark Sarbanes-Oxley Act of 2002, the overriding question is how much is too much.

Companies have generally supported the act’s intentions–at least publicly–but many complain about the cost of compliance. Specifically, ire has focused on the act’s Section 404, the main driver behind a surge in costs related to Sarbanes-Oxley.

A year ago, many companies complained loud and hard when auditing fees related to Section 404 came in much higher than costs from previous years. According to a study by Chicago law firm Foley & Lardner LLP of 708 large and small companies, average audit fees for 2004 were up 61 percent over 2003. For Standard & Poor’s 500 companies, the average tab was $7.4 million in audit fees in 2004, up from $4.8 million a year earlier.

Learning to live with Section 404 of Sarbanes-Oxley

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