Shareholders at Eastman Kodak Co., MCI Inc. and Chiron Corp. might beg to differ, though. They are seeing firsthand how those federal compliance rules can push companies to reveal poor financial reporting practices that should be stopped.

And for investors all around, the exercise of having corporate controls fully analyzed may give them more trust in the numbers that appear on financial statements.

Given all that, this surely sounds like time and money well spent.

Under section 404 of the Sarbanes-Oxley corporate reform law that Congress passed in 2002, large companies filing annual reports after Nov. 15, 2004, must assess the internal controls they have in place to ensure the effectiveness of their financial processes and procedures. Outside auditors must then vouch for those controls.

The point of such reviews is to catch mistakes before they become bigger problems, and prevent massive accounting scandals like those seen at the likes of Enron Corp. and WorldCom Inc. in recent years.

Companies have complained loudly about these new requirements. They say that most of the problems that could be discovered through this expensive and labor-intensive task will be insignificant and not material - meaning they are unlikely to effect the stock price or investors' opinions.

Government estimates initially put the cost of implementing 404 at $91,000 per company, but business groups say that expenses have far exceeded that. A new survey by the trade group Financial Executives International puts a $4.36 million price-tag on 404 compliance per company, a 39 percent jump from the $3.14 million that CFOs had been expecting to pay when surveyed last summer.

But all that corporate grumbling misses some crucial benefits. For one, the costs are a small price to pay if the results boost investors' confidence. More importantly, some of the reviews have turned up bad news.

About 11 percent of the more than 2,600 companies that filed their annual reports by March 16 - the deadline set by the Securities and Exchange Commission for large companies with fiscal years ending Dec. 31 - warned of material weaknesses, according to data compiled by the Corporate Executive Board, a Washington-based company specializing in research and executive education.

Take supercomputer maker Cray Inc. Its shares plunged 20 percent last week after the company warned it needed more time to complete its review. The company disclosed there were possible material weaknesses in its accounting, including inadequate review of third-party contracts and software applications documentation and controls. Seattle-based Cray added that its outside auditors have expressed doubts whether they will be able to render an opinion on its internal controls.

Although Cray stood by preliminary fourth-quarter and full-year results previously released in February, it warned that "there can be no assurance that there will not be a material change" in those results.

And that could just be the start of its problems.

"If the company were deemed noncompliant with section 404, the company could face issues including enforcement action, fines, higher implementation and re-audit fees, shareholders lawsuits and potential delisting from the Nasdaq" Stock Market, said Piper Jaffray senior research analyst Lee Santiago in a note downgrading Cray stock.

Eastman Kodak's internal controls have also been called into question. The company acknowledged that it has a material weakness involving its accounting for retirement benefits as well as income taxes. As a result, Kodak will restate its previously reported results for 2004 and 2003, lowering earnings.

MCI said it found a material weakness in its controls for income-tax accounting, and that it had a wider loss for the fourth quarter of 2004 than previously reported because of a tax-related error. Chiron noted three areas of material weakness in its internal accounting controls, including how it recognizes revenues for certain vaccine sales.

All of this leads to big questions: Where does this issue go from here? How do investors gauge if the problems are indeed fixed? Are these firms still at risk? Will this set the standard for aggressive auditing going forward?

One hopes such compliance standards will create an environment where financial fraud is harder to get away with. Should that ultimately be true, it would be worth every penny it cost to get there.

-- Rachel Beck is the national business columnist for The Associated Press