NEW YORK, July 23, 2003 A year after becoming law, the Sarbanes-Oxley Act of 2002 is viewed less favorably by executives at U.S. multinational companies than it was shortly after its implementation, PricewaterhouseCoopers’ Management Barometer has found. According to the survey, the percentage of executives with a favorable opinion of Sarbanes-Oxley dropped to 30 percent last month, down from 42 percent when the same group was interviewed in October 2002.

In addition, Management Barometer found that 91 percent of executives now say their company has made changes in control and compliance practices as a result of Sarbanes-Oxley, up from 85 percent in October. And only 68 percent are confident that their entire company is in compliance with Sarbanes-Oxley, down from 82 percent last October.

The Sarbanes-Oxley Act, enacted July 30, 2002 in response to U.S. corporate and accounting scandals, requires company executives, boards of directors, and independent auditors to take specific actions to achieve greater corporate accountability and transparency. The intent of the law was to help restore public trust in U.S. business and corporate reporting.

Thirty-five percent now think the law will help to restore investor confidence in the capital markets, compared with 31 percent in the October survey. However 50 percent continue to disagree about the impact of the law on investors, saying it has had little or no effect.

“Sarbanes-Oxley has proven to be far more complex and has required companies to make many more changes in control and compliance than executives originally thought, said Ellen Masterson, global leader of audit methodology for PricewaterhouseCoopers. “Consequently, more business leaders are now uncertain that their company is doing everything it should to be in compliance.”

Overall Assessment: Less Favorable

Today, fewer senior executives have a favorable opinion of Sarbanes-Oxley—and more are unfavorable—than shortly after passage:

	October 2002	June 2003
A good and adequate response to problems in accounting and reporting	9%	7%
A good first step in company accounting and reporting, but more needs to be done	33%	23%
Total favorable response	42%	30%
A well-meaning attempt, but will impose unnecessary costs on companies	42%	49%
Ill-considered and hastily-passed legislation that won't make any difference	15%	15%
Will actually harm rather than improve the capital markets	1%	5%
Total unfavorable response	58%	69%

“In their overall assessments, a growing number—now nearly half—cite Sarbanes-Oxley as a well-meaning attempt at reform, but temper that view with concern about the cost burden involved in corporate compliance,” Masterson noted.

More Say Compliance Is Costly

With more time and experience, far greater numbers have found it costly to bring their entire company into compliance:

	October 2002	June 2003
Extremely costly	---	3%
Very costly	3%	13%
Somewhat costly	29%	44%
Total	32%	60%

More executives also are concerned now about the long-term cost of control and compliance:

	October 2002	June 2003
Much higher long-term costs expected	12%	27%
Somewhat higher long-term costs expected	59%	58%
Total	71%	85%

“The number of senior executives describing Sarbanes-Oxley compliance as costly has nearly doubled from October to June,” noted Masterson. “And now, 85 percent expect higher long-term costs of compliance.”

Compliance Involves More Than Originally Thought

A greater percentage of executives now have found it necessary to implement changes in control and compliance than originally envisioned:

	October 2002	June 2003
Has required us to make some modest improvements	27%	39%
Has required us to make significant changes	4%	7%
Has or will substantially change what we do	---	1%
Total	31%	47%

Certification Risks

More also perceive an increased risk for their audit committee, CEO, CFO, and other executives providing sub-certifications:

	October 2002	June 2003
Much higher risk	17%	16%
Higher risk	48%	55%
Total	65%	71%

On average, surveyed business leaders now expect 22.5 executives, other than the CEO and CFO, will be required to provide sub-certifications at their company—up from 18.6 initially estimated.

“Certification-related risks, and the growing number of executives who must now sign off have clearly contributed to the sense of discomfort with Sarbanes-Oxley regulations at the top,” said Masterson. “The increased risk has caused many companies to schedule more-frequent meetings of their audit committee, to devote more time to the issues of audit risks and quality.”

Legislation Extended to Foreign Registrants

An unchanged number—83 percent—agree that Sarbanes-Oxley legislation should apply to foreign registrants, saying it is appropriate that all companies listed in the U.S. should play by the same rules. And, 15 percent continue to believe that any such SEC requirement is overreaching, and will have negative repercussions.

“Senior executives of U.S.-based multinationals remain resolute in their outlook on this issue,” said Masterson. “Almost all are saying that every U.S.-listed company should face the same regulatory regimen.”

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.pwcglobal.com) is the world's largest professional services organization. Drawing on the knowledge and skills of more than 125,000 people in 142 countries, we build relationships by providing services based on quality and integrity. “PricewaterhouseCoopers” refers to the 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.pwcglobal.com. For more information about Barometer surveys, including recent economic trend data and topical issues, visit www.barometersurveys.com.