Material weaknesses in internal controls exposed
NEW YORK – More than half of the internal control deficiencies disclosed in 2004 under Section 404 of the Public company accounting reform and investor protection (Sarbanes-Oxley) act of 2002, constituted material weaknesses, according to the Financial Executives Research Foundation, the research arm of Financial Executives International (FEI).
In a report, Control deficiency reporting: review and analysis of filing during 2004, the foundation says more than 50% of the disclosed internal control deficiencies relate to a weaker overall control environment.
The analysis is based on 968 internal control deficiencies and 1,000 remediation actions disclosed by 329 companies in their various SEC filings between November 1, 2003 and October 31
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