Early analysis of Year Two internal control reports indicates the number of companies that can’t meet deadlines to file their financial statements may be rising, but fewer companies are reporting problems with internal controls.
In a recent study of the companies Moody’s Investors Service follows to establish credit ratings, 75 companies that reported on their internal controls for the second time reported material weaknesses—down from 117 in the first year of compliance with Sarbanes-Oxley in 2004, when large companies had to begin reporting on the effectiveness of their internal controls over financial reporting. The analysis also showed the number of delinquent filers rose from 21 in 2004 to 29 in last year, with 11 companies filing late in both years.
