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US companies behind on Section 404

More than half of US companies have not completed preparations in meeting their Sarbanes-Oxley Section 404 filing requirements. This, according to a survey by ACL Services and the Centre for Continuous Auditing (CCA), is despite an extension of the 404 deadline from June 15 to November 15 2004. Section 404, which requires corporate management teams to assess internal controls, is just one component of the Sarbanes-Oxley issues. Fines and jail time, claim the surveys? authors, can be the result of non-compliance with Section 404. So it is surprising that more than two-thirds of US corporations possess no annual budget to maintain its compliance.

Of those companies to choose the early adoption path through technology, 25% say this achieves continuous monitoring of their internal controls. This compares to the 93% of respondents who stated continuous monitoring is either important or very important for an effective Sarbanes-Oxley strategy.

?The results of this survey reflect the concerns we have been hearing from the audit community,? comments Harold Will, president of CEO of ACL Services. ?They clearly demonstrate that many companies still maintain a short-term mindset when addressing the ongoing requirements set forth in Sarbanes-Oxley, despite a recognition of the benefits of ongoing and continuous monitoring of internal controls.?

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