May 5, 2005 -- On April 13, 2005 , the SEC hosted a series of roundtable discussions on the implementation of the internal control reporting requirements for public companies. The discussions were a result of Section 404 of the Sarbanes-Oxley Act of 2002, which directed the SEC to adopt rules requiring each public company to include in its annual report a statement of management’s responsibility for establishing and maintaining an adequate internal control structure and procedures for financial reporting, as well as an assessment of the effectiveness of those controls

The roundtables were made up of six panels designed to discuss several topics including first year results, reporting, planning and design, documentation and testing, using judgment in communications and conclusions, and the next steps. Members of each panel included Big 4 audit partners, presidents and CEOs of public companies, audit committee members, and board members.

A few of the key items mentioned were as follows:

• As of March 31, 2005 , 2,500 companies issued 404 certifications.  Of those 2,500, approximately 200 or 8% noted material weaknesses.

• The total cost-to-date of 404 compliance for companies is estimated at $35 billion, of which $15 billion is related to documentation and testing of IT controls.

• Based on estimates from data currently available, it is believed that 63,000 internal control weaknesses were identified and corrected by December 31, 2004 .

For more information, contact Joe Canataro at 215-564-1900 .

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