Many Companies Still Have No Dedicated Sarbanes-Oxley Budget

October 21, 2003 ( - Many US companies have still not budgeted the proper resources to achieve the required compliance under the Sarbanes-Oxley Act, a new survey found.

According to the Gartner, Inc. poll, about 85% of respondents said they do not have an official Sarbanes-Oxley budget. Gartner said estimated 2004 Sarbanes-Oxley spending would vary widely, from $15,000 to $4 million and include outside consulting, internal and external auditing, personnel, insurance and software.

Lacking a dedicated budget, many companies are robbing peter to pay paul, the survey showed. The projects being cut to free up compliance resources include:

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  • external consulting (53%)
  • enterprise resource planning (36%)
  • merger and acquisition activities (32%).

“This survey shows that most companies are not leveraging what they have learned from other regulations to achieve best practices for Sarbanes-Oxley compliance,” said Rich Mogull, research director for Gartner, in a statement “Companies are not addressing the financial requirements for compliance, so they’re spending in an ad hoc fashion to piece together a compliance management process. To comply with the Sarbanes-Oxley act and subsequent financial reporting legislation, companies must develop road maps and budgets for formal compliance management processes across their organizations.”

More than six of 10 respondents (65%) said they have formed a Sarbanes-Oxley steering committee while 28% have no plans to form one. The leading functions of the steering committees in 2003 include: legal compliance communication and progress (87%), internal compliance audit management (78%), and corporate governance policies and guidelines (78%).   Four out of 10 respondents said their company has appointed a Chief Governance Officer who is responsible for overseeing the processes and reporting to the Board of Directors on all compliance activity.

In September 2003, Gartner surveyed 75 respondents from publicly traded US companies publicly traded who are responsible for or directly involved in managing Sarbanes-Oxley compliance. Of the 75 participants, 29 were from firms with revenue greater than $1 billion, 20 were from companies with revenue from $500 million to $1 billion, and 26 represented companies having revenue of less than $500 million.

The report, Get Involved in Sarbanes-Oxley Compliance Projects Now is available on at .