Cost of Implementation of the Sarbanes Oxley Act

If you are curious just what the cost of implementation of the Sarbanes Oxley Act is predicted to be in the future, then one must learn about what exactly is the Sarbanes Oxley Act, first of all.  The best place to learn about the Sarbanes Oxley Act, as I have researched it, is at Wikipedia, where there is a brief, but thorough, explanation as to its description.  According to Wikipedia, the Sarbanes Oxley Act of 2002, a/k/a the Public Company Accounting Reform and Investor Protection Act of 2002, was signed into law for the purpose of tightening accounting and reporting practices, at the behest of public opinion and distrust, over the many corporate and accounting scandals that involved companies that eventually went bankrupt, as well as many resulting criminal charges being brought against CFO's and CEO's that defrauded stockholders and the general consuming public.  You may remember some of these companies:  Enron, Worldcom, and Tyco International, I would presume.

As far as the cost of implementation of the Sarbanes Oxley Act, there is a very good report done and posted online at Law.berkeley.edu, which involves a survey prepared by CNA International that reflects the total 404 implementation costs on average of implementing the Sarbanes Oxley Act.  According to the survey, the 404 implementation costs of the Sarbanes Oxley Act was expected, in late 2005, when the survey was published, to cost more in its first year of implementation, with a decline in cost in its second year of implementation.  Over the first year of the implementation of Sarbanes Oxley, it is expected, according to the survey, for a large company with a profit of around $8 billion, approximately, to spend $8 million for cost of implementation of the Sarbanes Oxley Act.

For further information from this very informative survey, refer to the PDF file of the survey at the law.berkeley.edu website with the Title of Sarbanes-Oxley Section 404 Cost and Implementation Issues: Survey Update prepared by CNA International in Washington, D.C.

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