Recently, the Big 4 for which I work held a get together of our clients whom we have been helping with their Sarbanes Oxley Implementation. The so called conference was to share lessons learned in Year One of Sarbanes Oxley 404 Implementation. As the day went by, many topics were discussed. I am jotting down my view of the learnings of all these companies in year one of the Sarbanes Oxley 404 implementation.

Lesson One - Most of our clients agreed that most controls over financial reporting were manual and were not formalized.

Learning two - Extensive use of spreadsheets and lack of controls for spreadsheet analysis and reporting.

Lesson three - Inefficiencies in processes since most processes relied on detective controls rather than preventive controls allowing errors to occur.

Lesson Four - Almost all of our clients had the view that employees did not fully understand the objectives behind the tasks they performed.

Lesson Five - Inadequate monitoring of controls to check whether controls were satisfying the control objectives.

Lesson Six - Finally, all of our clients agreed that one of the major lessons learned is importance of communications between departments which most complained was poor and led to inefficiencies.

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