A broad range of stakeholders involved with internal-control reporting will join in today’s Securities and Exchange Commission roundtable discussion on Section 404 of the Sarbanes-Oxley Act. (Read live commentary throughout the day from CFO senior writer Tim Reason.)
Expected to participate are representatives of companies ranging in size from behemoth General Electric to outpatient surgery-center company Symbion, which has a market capitalization under $500 million, as well as executives from the major accounting firms and from stock exchanges, attorneys, investor advocates, and regulators.
In advance of the roundtable — scheduled for 9:00 a.m. to 5:30 p.m. at the commission’s Washington, D.C., headquarters — the SEC received at least 185 letters or comments from interested parties.
Internal controls “has probably been the one section of Sarbanes-Oxley that has created the most complaints,” SEC Commissioner Roel Campos told reporters Monday, according to Dow Jones. Campos observed that “audit fees have gone through the roof” since the requirement took effect for large U.S. companies last year, according to the wire service.
“Our goal is to listen, to let people vent,” and to consider whether changes might be needed, he reportedly added.
The roundtable was scheduled not long before the SEC gave small companies and foreign companies an extra year — until mid-2006 — to implement Section 404.
According to a report released Tuesday and commissioned by the Big Four accounting firms, a sampling of Fortune 1000 companies each spent nearly $8 million to comply with Section 404, Dow Jones also noted. That’s roughly equal to 0.1 percent of each firm’s 2004 revenue and 25 percent of each company’s overall spending on compliance, Dow Jones further noted. According to the wire service’s account of the survey, this year the price tag is expected to plunge an average of 46 percent, to around $4 million.