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During the past 20 years, the author has watch China move from being a developing country into an industrial superpower
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Get Four
|  | SEPTEMBER 20, 2004
By Amey Stone Coping with the Compliance Crunch If your company is behind schedule on meeting the stiff Sarbanes-Oxley requirements, here are some helpful tips from the experts Section 404 of the 2002 Sarbanes-Oxley corporate-governance legislation requires companies to prepare a report assessing their internal financial controls and have their external auditor sign off on it. All large public companies with a fiscal year ending after Nov. 15, 2004, must complete the process by the end of their fiscal year, which leaves just a few months for outfits on a calendar year (see BW Online, 9/20/04, "Hardly Ready for Sarbanes-Oxley"). "It's an enormous effort, particularly for multinational companies," says Dan DiFilippo, a partner at PricewaterhouseCoopers. "There aren't a lot of shortcuts." Companies do have, however, a few ways to speed things up if they're falling behind. Here are some tips from the experts: Marshal all your resources on Section 404. This is a problem worthy of Herculean efforts. "My advice is, if you feel like you're late, stop all nonessential activities and focus all your efforts on getting this done," says John Hagerty, an analyst with AMR Research in Boston. It's unclear what penalties or market reactions companies will face if they miss the deadline or their auditors report material weaknesses in their internal controls, but as Hagerty notes, "no one wants to be the first to figure it out." Find some extra people to throw at the problem. If your internal audit staff is tapped out, turn to temp agencies. Dino Grigorakakis, regional vice-president for consulting services at temporary staffing firm Robert Half International, says its Management Resources and Accountemps divisions have been supplying staff for Sarbanes-Oxley-related jobs. "For the most part" he says Half has been able to fill demand, even though the supply of qualified candidates has decreased this year as the job market has improved, he says. Many companies are putting their most experienced internal accountants on Sarbanes-Oxley matters and hiring temps to take up the more routine tasks, says Grigorakakis. Another option: Turn to a local university where some accounting students may be happy to help out with some of grunt work involved. Look for ways technology can assist. For companies that operate on a calendar year, it's really too late to try to implement software to help with Section 404 this year, says Hagerty. But if your fiscal year doesn't end until next March or June, software packages may yet be able to help you automate some of the processes involved, he says. Tim Welu, CEO of Paisley Consulting, says compliance software, like his firm's Risk Navigator product, can help out, especially when it comes to organizing data into a coherent report. If you're still battling with reams of spreadsheets, that's not a bad idea.
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