Changes since Sarbanes-Oxley: Financial Executive/Deloitte & Touche survey.

• Author: Heffes, Ellen M.
• Position: Domestic news

You might think, what were they thinking--referring to those involved in writing provisions for The Sarbanes-Oxley Act, especially in light of its compliance demands on corporate America's finance executives. So, how much has really changed? To find answers to a few targeted questions, during the last two weeks of August, Financial Executive and Deloitte & Touche conducted an electronic survey to get some answers--via FEI's Web site and as an insert in FEI's Express email communication. Just under 100 executives (CFOs, controllers, SVPs, directors, EVPs) responded to the four multiple-choice questions and one open-ended question.

A general theme of the responses was one of resignation to comply with the new rules--although they represent "overkill"--and that rules cannot change those who would be dishonest. As to whether Sarbanes-Oxley has helped to restore public trust in U.S. business, as many said "yes," "probably" and that it was "too early to tell" as those who said "no."

"The greed of executives was the real cause of the Enron/WorldCom-type melt-downs," said one, adding that "this type of legislation penalizes organizations who operate with a social conscience and individuals who have taken their stewardship function very seriously. It attempts to legislate morality and ethics."

Respondees came from companies with revenues ranging from $25 million to over $5 billion; with 51 companies having revenues of $500 million and above; and 22 at $1.4 billion and above. Forty-three companies employ 2,500 and more; 15 employ 5,000-plus; and 19 employ l0,000-plus.

In 97 percent of the companies, the new regulations have been adopted--in 55 percent to a significant degree, and in 42 percent to a limited degree. Implementing Sarbanes-Oxley has improved the quality of internal controls in 74 percent of the companies--with 8 percent citing "significant" improvement, 66 percent reporting "slight improvement" and 26 percent saying there is "no improvement at all."

On the question of limiting the amount of work of outside accountants over the past year by the finance person or audit committee, 41 percent said "yes, to a small degree," 20 percent said "significantly," 28 percent said "no," and 11 percent don't ask their accountants to perform work other than audit.

When asked, "Has your directors' involvement with the company governance issues changed?" all but 8 percent said, "yes," but the degree varies: 61 percent, not significantly; 28 percent...