American
Executives Divided On Whether Sarbanes-Oxley Will Be Effective
Companies
still working to understand and comply with the law's
provisions
BOSTON,
Oct. 20 /PRNewswire/ -- Top executives at American public
companies are evenly split on whether Sarbanes-Oxley will prove
effective in reducing financial reporting problems, according to
a new nationwide survey commissioned by ARMA International, the
association for information management professionals.
At
the same time, less than one-third of executives (30 percent)
said their company today would be very well prepared to face the
challenge of a Securities and Exchange Commission (SEC)
investigation into their information control practices.
"More
than a year after Sarbanes-Oxley became law, companies are still
struggling to understand and comply with its provisions,"
said Peter R. Hermann, executive director and CEO of ARMA
International. "We all saw how document destruction
contributed to the demise of Andersen and Enron. One key to the
success or failure of this legislation is whether companies
comply with requirements to review and update their internal
controls for record keeping."
Highlights
of the research include:
--
Fifty percent of executives thought Sarbanes-Oxley would not be
effective at reducing financial reporting problems, while 48
percent said they felt it would be effective;
--
Just 10 percent of executives said they thought Sarbanes-Oxley
was very necessary, while a majority (54%) thought it was not
necessary;
--
More than one-third of companies (37 percent) have yet to assess
their own internal controls for managing information, which is
now required as part of a company's annual financial audit;
--
Ninety-five percent of executives said their companies will have
to make some changes to their records management procedures to
comply with Sarbanes-Oxley;
--
However, as evidence that companies still have a long way to go
to comply, 55 percent of executives said their company has made
only "some" or "a little" progress toward
Sarbanes-Oxley compliance;
--
Eighty-two percent felt that the provisions of Sarbanes-Oxley
would pose a substantial burden on their company;
--
And only 7 percent of those surveyed felt that the provisions of
Sarbanes-Oxley were very clear.
"Some
provisions of Sarbanes-Oxley, such as the requirement that CEOs
certify their company's financial results, have understandably
received a great deal of attention. But requirements surrounding
certifying records management controls must not be overlooked in
the process, or companies risk becoming the headline of the next
big corporate scandal," Hermann said.
The
survey results were released at the 2003 ARMA International
Conference and Expo, which is being held Oct. 19-22 at the
Hynes
Convention Center
in
Boston
.
International
Communications Research (ICR), an opinion research firm
based in
Media
,
Penn.
, conducted the random telephone survey of 150 executives from
America
's 5,000 largest public companies. Calls were made in September
and October 2003. Executives interviewed included Chief
Financial Officers (CFOs), Controllers, General Counsels and
Assistant General Counsels - officers within a company who
oversee Sarbanes-Oxley compliance. CFOs comprised 65
percent of the respondents, while 20 percent were Controllers
and 15 percent were General Counsels. The margin for error
for the survey is +/- 8 percent.
About
ARMA International
Established
in 1956 with a current international membership of more than
10,000, ARMA International ( www.arma.org ) is the oldest and
largest association for the records and information management
profession. It provides education and information to
professionals who are responsible for the efficient maintenance,
retrieval, and preservation of vital information created in
public and private organizations in all sectors of the economy.
To learn more about the ARMA International call 800.422.2762.
SOURCE
ARMA International
CO: ARMA International; 2003 ARMA International Conference
and Expo
ST:
Massachusetts
SU: SVY TDS
Web
site: http://www.arma.org
http://www.prnewswire.com
10/20/2003
10:47 EDT
