As subscribers know, Compliance Week is constantly tracking critical issues for legal and financial executives at public companies. And for the last six years, much of our coverage on the financial side of the house has dealt with fallout from The Sarbanes-Oxley Act, particularly Section 404. Much of that coverage has focused recently on how to comply, or how to do so more efficiently; however, occasionally it’s worth remembering why we comply as well.
Our two front-page articles this month play off a grand theme Compliance Week has noted many times over the years: As much as Corporate America may disparage it, disclosure and transparency—via Sarbanes-Oxley or the original Securities Acts—actually do work. Our lead story reports that audit fees at large companies rose only 3.2 percent last year, the lowest jump in modern memory, barely keeping up with inflation. Directly beneath that article is the tale of material weaknesses at large companies—or the lack thereof. We examined more than 400 companies in the Standard & Poor’s 500 to tally up material weaknesses they disclosed. Of that sampling, 11 companies confessed a grand total of 15 material weaknesses.
