We have not talked about the Sarbanes-Oxley Act in sometime, so let’s jump right in!!
Interestingly, over the last 10 years since Sarbanes-Oxley became effective, audit costs for public and private companies have increased significantly. We recently came across a survey published by Financial Executives International, indicating, that these fees increased somewhat over the last 10 years. Additionally, the vast majority of those polled by the survey did not support the PCAOB’s mandatory audit rotation plan, stating that it would increase costs significantly.
In reporting troubling results, the survey stated that only 37% of private companies had risk management processes in place. That means a significant majority of private companies could be at risk. One wonders if this leads to trouble in the future.
Finally, there was some positive aspects of the survey. The report found that those companies with centralized operations on both the public and private level saved money in audit fees as opposed to those who had decentralized operations.