Search
 
Best Practices

Here's A Loophole That The Feds Would Create On Purpose

After two years of suffering under the costly burden of 404, small and midsize companies could get relief through outright exemption or reduced standards

By John Labate | Updated on February 01, 2006

Thomas Brandt Jr., CFO of Telecommunication Systems Inc., a $143 million producer of wireless software, keeps in his office a paper-based reminder of his first-year compliance under Section 404 of Sarbanes-Oxley, even though everything is also stored on computer systems. Despite the Annapolis, Md.-based company’s relatively small size, the 404-compliance project fills 18 ringed binders with all the process documentation, records of testing, interim testing and follow-up testing. “It was documented to an extreme, which is not to fault our auditing group that made the judgments,” says Brandt. “They had to cover their exposures and err on the safe side.”

Telecommunication Systems’ recurring audit and related fees more than doubled during year one compliance, to $768,000, and as year two reporting winds to a close, Brandt expects those costs to be down by less than 10% at best. And Brandt, a Wharton School MBA and former PricewaterhouseCoopers auditor, considers his company one of the luckier ones, given that he had on hand a number of finance employees with Big Four backgrounds who could help guide the company through the new requirements, including Auditing Standard 2 (AS2), the guideline for Section 404 audits, which, like most aspects of Sarbanes-Oxley, only comes in one size. “It was the only comprehensive written guidance, and that meant it was for GE, IBM, Exxon and also me,” says Brandt.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.

Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Recommended Stories

Treasury & Risk

Join Treasury & Risk

Don’t miss crucial treasury and finance news along with in-depth analysis and insights you need to make informed treasury decisions. Join Treasury & Risk now!

  • Free unlimited access to Treasury & Risk including case studies with corporate innovators, informative newsletters, educational webcasts, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM publications including PropertyCasualty360.com and Law.com.

Already have an account? Sign In Now
Join Treasury & Risk

Copyright © 2024 ALM Global, LLC. All Rights Reserved.