Financial Executives International recently published an article indicating that full compliance with the now 12-year-old Sarbanes Oxley Act has yet to become reality.

Citing results from its own research as well as from Protiviti’s 2014 Sarbanes Oxley Compliance Survey, FEI also reports that the majority of executives believe the costs associated with continued compliance will keep growing or, at best, hold steady with current levels. Chicago area business owners are likely to experience this financial impact from requirements related to internal staffing, external vendors and workflow processes.

Time to staff up

As noted in a Houston Chroniclestory, even small businesses must parcel out accounting functions across multiple employees. Gone are the one-person-does-it-all days. One of the cornerstones of SOX is the prevention of embezzlement opportunities. Control of too many steps in the accounting flow by a single person makes fraudulent practices easier to engage in as well as to hide. Businesses today must hire enough staff to ensure this cannot happen. Accounting team members’ responsibilities must be clear and provide built-in checks and balances.

Multiple vendors required

Another of the primary federal guidelines outlined by SOX is the requirement for at least one external accounting vendor and possibly two per company, according to Reuters. Vendors that perform audits may not also perform ongoing tax or general accounting work for the same clients—and ongoing audits must be conducted by external vendors instead of internal staff. Additionally, many accounting firms’ fees have or will rise as they pass on the costs associated with their own oversight.

Storage requirements expanded

In a recent issue, Barron’s highlighted another level of compliance that may fall upon companies after a decision handed down by the U.S. Supreme Court in which a commercial fisherman was convicted for failing to save three fish. The case changed the thought that the original SOX requirement for saving evidence pertained only to data and expanded it to include actual products as well. Such a ruling means companies will face much higher costs associated with storing items that could potentially be used or needed as evidence down the road.

Issues still exist

Among industry experts, SOX is credited with reducing unethical accounting practices. Its praise, however, does not stand alone as the act has also received some noted criticism by others. One point in particular stands out relating to the external audit process. Auditing firms must essentially choose between doing the right thing and biting the hand that feeds them. If serious issues are found during audits, vendors must either turn in those that pay them or turn a blind eye. This is just one issue yet to be fully flushed out in some people’s eyes.

Despite ongoing issues, SOX is here to stay. Companies of all sizes must accept this and work to integrate compliance into their everyday business models. Optimal integration includes internal and external resources as well as procedures and practices.