Magazine article Strategic Finance

Financial Executives Evaluate SOX Compliance

Magazine article Strategic Finance

Financial Executives Evaluate SOX Compliance

Article excerpt

A majority of financial executives (79%) say their companies have stronger internal controls as a result of complying with the Sarbanes-Oxley Act (SOX), and 74% say their companies have realized a benefit from compliance. As to what kind of benefit, 46% say SOX compliance ensures the accountability of individuals involved in financial reports and operations, 33% mention a decreased risk of financial fraud, 31% say reduced errors in financial operations, 27% note improved accuracy of financial reports, 25% say it empowers the board audit committee by providing it with deeper information, and 20% mention it strengthens investors' view of the company. On another note, 31% of the respondents say that more than 50% of their financial department professionals hold financial certifications (such as CMA, CFM, CIA, CPA, etc.) from an organization with an enforceable ethics code.

These are a few of the results of a survey of 222 financial leaders (CFOs, controllers, treasurers, vice presidents, and directors) conducted recently by Oversight Systems, Inc., which continuously monitors key controls required for SOX Section 404 certification. In other findings, 57% of the respondents say SOX compliance was a good investment for stockholders, yet the results were mixed as to the value for shareholders. For example, 37% note that SOX increased shareholder value because investors know the business operates ethically, yet 33% say SOX created a cost burden that suppresses their stock price. …

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