Failure to fully implement SOx requirements is costing CFOs their jobs, according to a report by ARC Morgan. The study, entitled ?Using reported weakness disclosures to benchmark internal control?, surveyed 350 companies registered with the US Securities and Exchange Commission (SEC). It found that the disclosure of deficiencies in a company's financial reporting had resulted in more than 60% of CFOs losing their jobs ? either by resigning or being pushed out.
In 86% of cases problems with financial reporting had been uncovered by external auditors, rather than by the company's management or consultants during the internal compliance process. In such cases the CFO often shouldered the blame, resulting in a prompt exit from the company.
The study advised CFOs to be closely involved with the implementation of SOx, ensuring that problems are addressed before the external auditors arrive.