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A. Accounting and Auditing Cost
The chief regulatory culprit in the Sarbanes-Oxley Act is SOX 404, which requires inclusion of internal control disclosures in each public corporation’s annual report. This disclosure statement must include: (1) a written confirmation by which firm management acknowledges its responsibility for establishing and maintaining a system of internal controls and procedures for financial reporting; (2) an assessment, as of the end of the most recent fiscal year; (3) a written attestation by the firm’s outside auditor confirming the adequacy and accuracy of those controls and procedures.
The Securities and Exchange Commission (SEC) initially estimated SOX 404 compliance would require only 383 staff hours per company per year. According to a Financial Executives International (FEI) survey of 321 companies, firms with greater than $5 billion in revenues spend an average of $4.7 million per year to comply with SOX 404. The survey also projected......

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Approximate Word Count: 1051
Approximate Pages: 5 (250 words per double-spaced page)

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