FEI Survey on Sarbanes-Oxley Section 404 Implementation

Published April 6, 2006

For those companies in their second year of compliance with Section 404 of the Sarbanes-Oxley Act of 2002, year-two costs of compliance were somewhat less than the corresponding year-one costs. This was one of the findings of Financial Executives International’s (FEI) latest survey of financial executives regarding their experiences in complying with Sarbanes Oxley’s Section 404.

Among the other key findings, the financial executive respondents:
• suggest that auditor guidance from the Public Company Accounting Oversight Board (PCAOB) still needs clarification;
• agree that compliance with Section 404 has raised investor confidence, but has done so at a price;
• say there was a decline in auditor fees for all accelerated filers (average of 13%), but this was less than anticipated in an earlier (March 2005) survey of FEI members, when auditor fees were expected to drop 26% in the following year.

This latest FEI survey was conducted March 17 through March 27, 2006.

Press Release

Executive Summary

Implementation Survey

Survey Detail Report Package (free to members, $99 to purchase for all others)

Package includes:
• Exhibit A -- Costs by Filing Status
• Exhibit B -- Costs by Sales Revenue
• Exhibit C -- Benefits by Filing Status
• Exhibit D –- Audit Issues
• Exhibit E -- Suggested Improvements to Section 404
• Exhibit F -- Auditor Execution on PCAOB May Guidance

members only

FEI Member Write-in Comments re: Sarbanes-Oxley Section 404 Implementation