MENLO PARK, Calif., June 4, 2012 /PRNewswire/ -- Ten years after the signing of the Sarbanes-Oxley Act (SOX), the majority of executives and other professionals surveyed say the internal control over financial reporting structure in their organizations has significantly or moderately improved since compliance with the legislation became a requirement, according to a new study from Protiviti ( www.protiviti.com), a global consulting firm.
"Sarbanes-Oxley has had its share of controversy in the past, but nearly 70 percent of respondents in our survey reported that the internal control over financial reporting structure in their organizations has improved since compliance with Sarbanes-Oxley Section 404 became a requirement," said Brian Christensen, Protiviti's executive vice president, global internal audit. "Companies are still learning and working to improve continuously the quality of their internal controls as well as the effectiveness and efficiency of their compliance processes, even 10 years later."
The majority of executives surveyed said they also are focusing on automation of their companies' internal controls to realize the full benefit of the landmark legislation; in fact, only 17 percent of respondents said they have no plans for further automation. "Automating key controls likely represents the 'final frontier' in terms of significant Sarbanes-Oxley process improvement and cost savings," said Jim DeLoach, a Protiviti managing director and the firm's senior SOX practice leader as well as a key survey architect. Automation provides significant opportunities for setting a proactive/preventive tone to the internal control environment and supporting the mission to simplify and streamline business processes, gain greater efficiency and achieve long-term cost savings.Protiviti's 2012 Sarbanes-Oxley Compliance Survey ( www.protiviti.com/soxsurvey) – which includes feedback from nearly 600 executives and other professionals who are involved with or have a stake in the SOX compliance process – explores the many issues companies address related to SOX, from cost and resource constraints to achieving a stronger internal control environment and improved operational efficiency and effectiveness. This is the third year Protiviti has conducted the survey. "Sarbanes-Oxley and its subsequent laws and regulatory guidance have had significant effects on corporate America,"said Christensen . "Over the past decade, opinions of SOX have evolved as much as the law itself. Our survey results reflect this changing sentiment. We were also pleased to see the large number of respondents to this year's survey as it indicates a high level of interest in improving the compliance process." Key Survey Findings Other key findings from Protiviti's 2012 Sarbanes-Oxley Compliance Survey include:
- According to respondents, the top benefit of SOX is "enhanced understanding of control design and control operating effectiveness" (44 percent), followed closely by "internal audit's ability to perform more traditional audits" (43 percent). "The percentage of responses in these top categories is markedly lower than those from the 2011 survey," Christensen said. "However, our 2012 survey presents clear evidence that many companies are still focused on reducing the number of key controls, streamlining the total population of controls, narrowing the overall assessment scope, decreasing the number of manual controls and increasing the number of automated controls."
- Companies, regardless of size or year of compliance, plan to maintain their current level of spending on compliance in the upcoming fiscal year – a possible indicator that organizations have the compliance process well-managed and under control.
- A majority of large organizations (73 percent) leverage their SOX compliance efforts to drive continuous improvement in business processes that affect financial reporting, and a significant majority of organizations that are beyond their fourth year of compliance (69 percent) do so.