Regulations appear to be achieving what the government intended.
Investors, not CIOs, are in a better position to judge whether Sarbanes-Oxley is improving their confidence in the numbers reported by companies. But CIOs do know a fair amount about security, and they believe that regulations are making financial, customer and employee data more secure—just what legislators hoped for. Meanwhile, compliance isn’t proving to be a drag on profitability for most companies. In short, there’s been gain without universal pain. However, for the second year in a row, 25 percent or more of respondents who comply with the Sarbanes-Oxley Act say their company has disclosed material weaknesses or significant deficiencies in internal controls. The surprisingly high number indicates that Sarbanes-Oxley is forcing companies to confront problems with their financial reporting and controls—problems that are widespread.
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