Is non-compliance the way forward? 155
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I understand your frustration: but quite simply… it’s the law.
SOX isn’t an optional extra. It isn’t a ‘nice to have’. It’s legislation, with specific requirements and deadlines. If you refuse to comply, you are breaking this law, and are subject to the consequences that follow. Do you want to take that risk?
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Interesting thought. I believe that the law requires management to document their understanding of processes and make an assertion as to the effectiveness of internal controls. Are you still in compliance with the law if your assertion is that they are not effective or if you do not have enough evidence to make that assertion?
I think that Wall Street will be the deciding factor and that it will ultimately be that this is a permanent change in how we do business. It would take all companies listed on a major exchange to rebel against the requirements for anything to happen. If only a few rebel, then they will likely be punished in the marketplace as their stock plummets (who will want to invest in a company who cannot or will not guarantee that they have adequate internal controls in place?).
What I do think will change is that the public accounting firms will ease up a bit on the level of documentation that they think companies need in order to get happy with the effectiveness of controls. I think that your auditor is trying to be conservative as to fee increases. While we will see increases in fees, I don’t expect them to be as large as you have indicated.