Companies complaining about the cost of complying with Section 404 of the Sarbanes-Oxley Act could be missing an opportunity to reduce those expenses through one of the less-understood elements of a good internal controls framework: monitoring.
The Committee of Sponsoring Organizations believes that companies aren’t paying enough attention to monitoring, according to Dave Richards, president of the Institute of Internal Auditors. “An organization needs to have in place ongoing activities [that] validate that the controls are functioning as they were designed,” he says. “That is, in essence, what the 404 assessment is asking organizations to say at a point in time.”
