July 19, 2004 --  Looming compliance deadlines hang over many CEOs and executives. Under Section 404 of Sarbanes-Oxley (SOX), the management of a public company must assess the effectiveness of the company's internal controls over financial reporting. For calendar-year public companies with a market cap of more than $75 million, the deadline to be in compliance with Section 404 is less than six months away – December 31, 2004 . For calendar-year public companies with a market cap of under $75 million, the deadline is one year later – December 31, 2005 . With compliance audits requiring nearly 90 days to complete and another 90 days to verify any modifications that may have been addressed during the initial audit phase, non-accelerated filers are nearly out of time and non-accelerated filers need to act soon to avoid the pitfalls many accelerated filers have faced – increasing delays and unforeseen contingencies.

Asher & Company, Ltd. joins 14 other independent CPA firms in North America in the newly-formed Alliance for Sox 404 Compliance to offer cost-effective, just-in-time SOX 404 compliance services. This collaboration is the first of its kind to provide professional services and documentation management while uniting accounting firms around a product offering. The far-reaching implications of SOX 404 engagements drew the firms together to leverage resources and experience.

Many Alliance members are former Final Four auditors. The Alliance combines the skills, experience and knowledge base of prominent independent local CPA firms and offers these customized audits at more affordable, middle-market costs without sacrificing the sophisticated SOX 404 compliance technology. 

The Alliance for SOX 404 Compliance offers member firms an infrastructure that allows them to scale resources quickly and easily as well as tap into a vast experience base, including recognized SOX 404 industry experts, SOX 404 IT specialists and associated SOX 404 internal audit technology. This progressive, international network of independently owned and operated CPA firms, supported by software company, Pipeline Software, shares the desire to provide the highest caliber of SOX 404 professional and automation services to public companies. Additionally, the Alliance welcomes the opportunity to work with other accounting and consulting firms seeking additional resources to help them complete the internal auditing and documentation required by the law’s deadline.

Since its launch in April 2004, the Alliance has swelled to 15 members across North America . Members include: Asher and Company (Pennsylvania); The Bonadio Group (New York); Cooper Molyneaux, LLP (Canada); Grassi & Co. (New York); Eadie and Payne (California); Moore Stephens Apple, Inc. (Ohio); Moore Stephens Wurth Frazer Torbet (California); MSF Financial (Arkansas); Orozco, Medina Y Asociados, S.C. (Mexico); TravisWolff (Texas); Watkins, Meegan, Drury (Washington, D.C.); Brown Smith Wallace (Missouri); and Pipeline Software (California).  The Alliance for SOX 404 Compliance member firms serve clients from across the nation with clients in many industries, including banking, high technology, health care, not-for-profits and manufacturing.

Working together the Alliance serves as a facilitator, brand manager and R&D resource. Each individual alliance member, like Asher & Company, Ltd., is responsible for managing their own projects in their market area.

The Alliance offers four different solution models based on a belief that a “one size fits all” solution is inappropriate for all different types of firms covered under SOX 404.  The Alliance delivers a menu of structured, comprehensive approaches to many different business needs, for example:

·         SCA Basic – provides a process for identifying, planning, documenting, testing, evaluating, fixing and reporting on internal controls;

·         SCA Compliance Point – provides Web-based software for creating an enterprise wide framework to configure, automate and monitor compliance activities;

·         SCA Comprehensive – provides a combination of process and framework solutions;

·         SCA Complete – provides a 100% turnkey SOX 404 solution.

For more information on Asher’s membership in the Alliance for SOX 404 Compliance, contact Joseph W. Beach at 215-564-1900.

For more information on the Alliance for SOX 404 Compliance, visit the Alliance Web site www.sox404.biz.  For more information about CompliancePoint, visit the Pipeline Software Web site at www.pipelinesoftware.com or contact Charlie Sundling at 949-251-9500

About Sarbanes-Oxley Act of 2002

The Sarbanes-Oxley Act of 2002 seeks to restore public confidence in corporate America by imposing broad and far-reaching reforms on corporate governance, disclosure, the conduct of accounting firms and the fundamental nature of their relationships with publicly traded companies. SOX requires business executives to personally take responsibility for the accuracy of their company's financial statements.

A number of the Act’s sections (301, 401, 409, 802, 806, 1102) deal with collection and dissemination of financial information. Sections 302 and 906 require publicly owned companies to certify that their financial statements are accurate. The Act has teeth: Titles VIII, IX and XI impose millions of dollars in penalties and up to 20 years in prison for offenders.

One section of the Act that serves as a common denominator to all of the sections – Section 404 “Internal Control Review and Auditor Attestation” that requires publicly owned companies to thoroughly investigate and take responsibility for all of its internal operational and financial controls within specified deadlines. To fulfill these requirements, companies need both a well structured and coordinated process, and a framework for project management, record storage and retention, and document management.

Between professional consulting services (process) and software (framework), a typical SOX 404 engagement requires significant resources – namely time, expertise and money.  Bringing a corporation into compliance can run from hundreds of thousands to well over a million dollars. Financial Executives International (FEI) surveyed 83 of its members at public companies with average revenues of $3.3 billion. On average, public companies expect to spend more than 6,000 hours—including internal resources, external resources, and attestation time—and an additional $480,000 in software and IT consulting to comply with Section 404.

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