NEW YORK, July 14, 2004 — By a margin of nearly two to one, large U.S. companies have made compliance with the Sarbanes-Oxley Act part of their regular corporate governance approach and have integrated it with other regulatory activities, according to PricewaterhouseCoopers’ Management Barometer.

The survey of senior executives at U.S.-based multinational companies found that:

• 64 percent say their company’s senior management and board of directors see Sarbanes-Oxley as one of many steps in a larger corporate governance initiative, while 30 percent say it is simply a goal to be achieved. Six percent are uncertain.

• 62 percent report Sarbanes-Oxley is integrated with their other corporate regulatory compliance processes, but 34 percent say it is not. Four percent are uncertain.

“Integrating the requirements of Sarbanes-Oxley compliance into ongoing corporate governance and regulatory activities, rather than managing compliance with the law as a separate task, offers the potential for improved business performance in both the short and long term,” said Dan DiFilippo, Partner and U.S. Practice Leader, Governance, Risk and Compliance, at PricewaterhouseCoopers.

Tracking Costs of Compliance

Despite complaints by some companies about the increased costs and regulatory burden imposed by Sarbanes-Oxley, most respondents, 56 percent, said their company does not track and report internally on the costs of Sarbanes-Oxley and other compliance programs. Forty-one percent do track such costs.

“Given the early outcry about Sarbanes-Oxley’s added costs, it’s surprising that most companies do not document and track this expense,” said DiFilippo. “However, many companies have only recently begun to understand the types of costs and value associated with compliance efforts. We expect more aggressive monitoring as companies examine the effectiveness of their compliance approach.”

Remediation Efforts Expected

According to the survey, 79 percent of senior executives say their company must make improvements in order to comply with Section 404 of Sarbanes-Oxley, which requires companies to file a management assertion and auditor attestation on the effectiveness of internal controls over financial reporting. Among areas needing remediation:

Financial processes	55%
Computer controls	48%
Internal audit effectiveness	37%
Security controls	35%
Audit committee oversight	26%
Fraud programs	24%

Process Improvements for Future Compliance

Looking ahead, 93 percent of executives expect their company to launch process improvement initiatives to streamline future Sarbanes-Oxley compliance. Among areas cited:

Financial reporting	63%
Risk identification and assessment	61%
Risk mitigation	55%
IT security strategy and implementation	55%
Internal audit	55%
Compliance management	54%
IT oversight and operations	45%

“Companies recognize the need to make improvements in order to comply with the requirements of Sarbanes-Oxley,” said DiFilippo. “When executives are confident that they are in compliance, many will want to find ways to streamline business processes and make future compliance less difficult.”

PricewaterhouseCoopers’ “Management Barometer” is an established quarterly survey in the U.S. These surveys are developed and compiled with assistance from the opinion and economic research firm of BSI Global Research, Inc.

PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services for public and private clients. More than 120,000 people in 139 countries connect their thinking, experience and solutions to build public trust and enhance value for clients and their stakeholders. “PricewaterhouseCoopers" refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.

Direct questions about Management Barometer to Pete Collins, survey director and publisher, at 646-394-4496 or e-mail to: pete.collins@us.pwc.com.

For more information about Barometer surveys, including recent economic trend data and topical issues, visit www.barometersurveys.com.