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compliance cash burn

Filed in archive Compliance by leon on November 14, 2005

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The costs of SOX compliance. Some businesses still say they are burning money. In the beginning, there was talk of it being an initial one-off cost, but the latest from AMR Research says compliance overheads will hit $6.1 billion this year. A new Accenture survey found that more than 60 per cent of finance executives believed that the technology for compliance was either "somewhat'' effective or not effective and nearly half (42 per cent) said they would need additional staff over the next three years. So much for a one-off investment!!! Movaris, a provider of financial control management and compliance software, has put out a white paper saying that in 2004, most companies based their compliance efforts on desktop tools such as word processing, spreadsheet and diagramming applications. Trouble is these tools can be like sending in the cavalry against tanks, stealth bombers and a fleet of F-35 Joint Strike fighterslinks. Heroic but are they effective? By themselves, they are not up to sustaining compliance. For a start, they don't automatically send reminders and instructions for compliance-specific tasks and they definitely don't automatically detect issues, and then track them until they are resolved. Movaris estimates that on-going compliance for a mid-market company will cost almost $2.1 million using labor intensive methods but $800,000 with advanced financial control management technology.






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