SOX: delaying reports, boosting costs, curbing shelters.Compliance with Sarbanes-Oxley Act See SOX. (SOX) requirements is delaying the release of annual reports of hundreds of public companies, boosting costs, and curbing abusive tax shelters Abusive tax shelter A limited partnership that the IRS judges to be claiming tax deductions illegally. abusive tax shelter A tax shelter in which an improper interpretation of the law is used to produce tax benefits that are , according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. recent news reports. Nearly 300 publicly traded companies publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. have announced that annual reports will be filed late due to SOX compliance requirements, up from 70 this time last year, according to The Washington Post. Many of the companies blamed Section 404 requirements for the delay. Costs of complying with SOX continue to skyrocket, according to a recent Financial Executives International survey. The average cost of compliance for the 217 companies surveyed jumped 132 percent in 2004, from a forecasted $1.9 million to $4.4 million, according to the Financial Times. SOX may also be curbing the proliferation of abusive tax shelters, according to The Washington Post. An academic interviewed by the newspaper stated the increased value of the audit has meant fewer resources have been committed to developing tax shelters. Firms do not want to risk negative attention from the IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. that might jeopardize audit work. For more information on the impact of SOX, contact Barbara Benton at bbenton@ohio-cpa.com or 800.686.2727, ext. 324. This article ran in the Ohio e-CPA Weekly on March 28. |
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