Current Compliance Challenges
For most companies, achieving Section 404 compliance has proven to be more challenging, and more costly, than they initially anticipated. In most cases, initial and year-two compliance efforts strained company resources while still leaving internal control issues, causing many organizations to take a bare-minimum approach to meeting the requirements of the Act. As a result, companies are currently facing the following challenges:
Most compliance activity time continues to be spent on remediation, leaving little time to develop a long-term compliance plan or to create more efficient processes.
The cost of compliance has actually grown in some cases as a result of a substantial increase in material weakness disclosures and restatements.
Many organizations do not have an appropriate infrastructure and implementation plan sufficient to sustain compliance, minimize risks, and reduce costs.
Therefore, any discussion about sustaining compliance should be focused on developing a plan that facilitates cost reduction/minimization, increased reliability/confidence with financial results, and delivering benefits/value.
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