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One of the most costly and time-consuming provisions of the Sarbanes-Oxley Act is the requirement for publicly-traded companies to test and report on the adequacy of their internal accounting controls - the "404 Report".
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The Sarbanes-Oxley Act was enacted in 2002. For publicly-traded companies registered with the Securities and Exchange Commission, it requires greater accountability for financial management and reporting practices.
| Not-for-profit organizations and privately-held companies aren't required by law to comply with Sarbanes-Oxley or issue a 404 Report, but some are doing it anyway. Why? Because they realize some of the the benefits of the law and a "clean" report, including:
 Favorable publicity that can attract resources from foundations, government agencies, individual donors, members, and other not-for-profit organizations.
A sense of comfort for management and the board.
A more favorable insurance premium for their fidelity bond.
The trick is deciding whether the benefits outweigh the costs. There are lots of variables involved in the answer, including the size of your organization, staff, and budget. Some organizations are adopting parts of Sarbanes-Oxley, such as revising their ethics codes and setting up whistleblower programs.
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Contact M. Scott Hursh, CPA, Managing Partner for the Stambaugh Ness Not-For-Profit practice to discuss whether complying with Sarbanes-Oxley is beneficial for your not-for-profit organization. You may also contact Audit Manager Darren Welker, CPA, who is a member of the Stambaugh Ness Internal Audit Team. You can reach them at 717-757-6999 or 800-745-8233 or send an inquiry by using the form below. |
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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
IRS Circular 230 Notice: To ensure compliance with requirements imposed by the IRS, we inform you that any US tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code.
Securities and advisory services offered through Geneos Wealth Management, Inc. Member FINRA/SIPC. Geneos Wealth Management, Inc is not affiliated with Stambaugh Ness. |
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