Is it possible that Sarbanes-Oxley compliance is becoming a little easier? According to a new survey from Protiviti Inc., organizations today are realizing tangible benefits from updated regulatory rules and guidance pertaining to Section 404 of the Sarbanes-Oxley Act that were issued in May of 2007 by the Public Company Accounting Oversight Board (PCAOB) and U.S. Securities and Exchange Commission (SEC).

According to the study by Protiviti, a global provider of internal audit and risk and advisory services, approximately four in 10 internal audit departments have been able to decrease the amount of time devoted to Sarbanes-Oxley compliance activities since the new guidance and standard were announced.

As a result, these departments are increasing their efforts to "rebalance" toward both more traditional internal audit responsibilities that include regulatory compliance as well as being strategic business advisors to senior management and the board's audit committee.

These are among the many findings of Protiviti's third Internal Audit Rebalancing Study, which surveys and analyzes how organizations are shifting internal auditing responsibilities away from a primary focus on Sarbanes-Oxley compliance to a broader scope of activities. The survey of 321 internal audit professionals was conducted in early 2008. Protiviti's report about the study,
titled "Moving Internal Audit Back into Balance," will be of great interest to C-level executives as well as internal audit professionals seeking greater understanding into the impact of Sarbanes-Oxley compliance activities on their internal audit functions. A complimentary copy of the report is available online at

"The great news here is that the SEC's interpretive guidance and PCAOB Auditing Standard Number 5 are having their desired effects," says Bob Hirth, executive vice president at Protiviti's Internal Audit practice. "Without question, companies have been investing a tremendous amount of time on Sarbanes-Oxley compliance, particularly in the first years after the law went into effect. Our survey findings indicate that as a result of the new information from the SEC and PCAOB, companies are establishing a more finite number of controls, thus enabling them to reduce the time spent
on compliance and then shift, or rebalance, their focus to other key areas in the organization."

The survey results also confirmed that external auditors are increasing their reliance on the work of a company's internal auditors, as PCAOB AS5 enables. "This is another positive development in helping organizations streamline the compliance process around Section 404 and internal control
over financial reporting," Hirth says.

Other key findings from Protiviti's 2008 Rebalancing Study include:

The most common activity related to rebalancing is rescoping workloads within the internal audit department. Hirth said that Protiviti's study now shows a three-year trend indicating that rather than hire new resources, more organizations are rescoping workloads.

Similar to the results from last year's study, one in three companies report that rebalancing is underway, and approximately one in five companies report having achieved rebalancing.

The benefit of rebalancing cited most frequently by respondents was "internal audit being able to perform more traditional audits." Also ranking highly was "more appropriate coverage of risk." Hirth explained that executives continue to see the importance of shifting the focus of the internal audit function back to broader responsibilities, which in turn provides them with higher confidence that the internal audit function is improving the organization's overall risk management efforts.

Companies reported that efforts to reduce the total population of controls as well as the number of key controls exceeded significantly what was planned last year (as reported in Protiviti's 2007 Internal Audit Rebalancing Study). "This is a key indicator that PCAOB AS5 and the SEC's interpretive guidance, both of which allow for such reductions, are having the impact that
was intended."

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