Foley and Lardner's fifth annual survey on the financial impact of Sarbanes-Oxley is out, according to Reuters. There aren't many surprises, as far as I can tell. Just like last year's study, this one reveals the cost of Sarbanes-Oxley compliance has fallen, but the savings isn't coming from reduced audit fees. In fact, the rising cost of audit and legal fees associated with compliance means the overall out-of-pocket costs of Sarbanes-Oxley are increasing.
From the study:
It is important to note that the majority of cost savings experienced by public companies after their initial implementation of Section 404 are driven by increased internal efficiency reducing lost productivity... Nevertheless, out-of-pocket costs associated with Sarbanes-Oxley Act compliance continue to increase.
Public companies that have less than $1 billion in yearly revenue spent about $2.82 million on compliance in 2006, which is down from the 2004 spend of $3.44 million but up from 2005's $2.79 million. Ever-increasing audit and legal fees associated with compliance appear to be the culprits, the research shows. Audit fees rose 4 percent last year for mid-sized companies, 5 percent for small businesses and 6 percent for the largest public companies.