July 19, 2005
Material Weaknesses Skyrocket
For those smaller cap companies who hope that SOX 404 will be weakened for them, look at these stats. Material weaknesses are being reported in record numbers by companies of all sizes. This does not make the case for weakening the legislation.
By the time Cox takes office, there will be so much data to support that companies of all sizes have material weaknesses but especially those of smaller market caps.
Excerpt from CFO.com article on Material Weaknesses under Section 404
"Looking at the data by market capitalization, the report found that almost 11 percent of publicly traded companies with a market cap over $75 million reported internal control deficiencies between January 1, 2004, and May 2, 2005. Those companies reported a total of 672 disclosures during that period — 61 percent of the 1,104 disclosures overall. Companies with a market cap under $75 million — the "non-accelerated filers" that are not required to comply with Section 404 until their first fiscal year ending after July 15, 2006 — reported 39 percent of the material weaknesses disclosed during that period."
To crush the cost and improve quality of your compliance efforts, see www.issuescentral.com for more information on the Sarbanes-Oxley Compliance Playbook(tm).
By the time Cox takes office, there will be so much data to support that companies of all sizes have material weaknesses but especially those of smaller market caps.
Excerpt from CFO.com article on Material Weaknesses under Section 404
"Looking at the data by market capitalization, the report found that almost 11 percent of publicly traded companies with a market cap over $75 million reported internal control deficiencies between January 1, 2004, and May 2, 2005. Those companies reported a total of 672 disclosures during that period — 61 percent of the 1,104 disclosures overall. Companies with a market cap under $75 million — the "non-accelerated filers" that are not required to comply with Section 404 until their first fiscal year ending after July 15, 2006 — reported 39 percent of the material weaknesses disclosed during that period."
To crush the cost and improve quality of your compliance efforts, see www.issuescentral.com for more information on the Sarbanes-Oxley Compliance Playbook(tm).
