sarbanes-oxley compliance cost estimates
SARBANES-OXLEY COMPLIANCE COST ESTIMATES
SOAR 62% SINCE JANUARY ‘04
Complying with Section 404 of The Sarbanes-Oxley Act will cost public companies an average 62% more than previously anticipated, according to a July 2004 FEI survey. The increase in Section 404 compliance costs stems from a 109% rise in internal costs, a 42% jump in external costs and a 40% increase in the fees charged by external auditors.
FEI surveyed 224 public companies with average revenues of $2.5 billion to gauge Section 404 compliance cost estimates. Results showed the total cost of compliance is now estimated at $3.14 million, or 62% more than the $1.93 million estimate identified in FEI’s January 2004 survey. The companies surveyed expect to pay their auditors $823,200 in fees for attestation of their internal controls, in addition to the annual audit fees. This compares to the $590,100 companies expected auditors would charge for attestation in January 2004.
Exhibit A: Responses by Company Size (MS Excel)
Exhibit B: Responses from Companies Over $1 billion in revenue
Exhibit C: Responses from Companies Over $5 billion in revenue