The findings of their intensive one-day interaction are found in the report "Sarbanes-Oxley Section 404 Implementation - Practices of Leading Companies," published by the research arm of FEI. The report also outlines some of the unintended consequences of Section 404 compliance.

Sarbanes-Oxley Section 404 requires public companies to evaluate the effectiveness of internal controls over financial reporting. Further, an external auditor must audit these internal controls in conjunction with their audit of the financial statements. 

The report, $99 through FEI's bookstore, covers nine areas of implementation focus for Sarbanes-Oxley Section 404, which include organization structure; scope, documentation, and testing; IT controls; use of external resources; relationship with the auditor; deficiency management; audit committee communications; Section 302/404 certification process; management letter and reporting.

For each area, the report lists the practices of leading companies, followed by a case study of a Fortune 500 company.

Most participating companies agree that compliance with Section 404 has resulted in benefits to their businesses, such as encouraging a thorough review of existing processes. Most also agree that compliance has also resulted in some excessive costs, diversion of management's attention from running the business, placing restrictions on IT system changes, and placing U.S. companies at a competitive disadvantage.

"Evaluating the results and understanding leading practices of first year implementation activities is an important step to sustainability," said Cheryl de Mesa Graziano, FERF Director of Research and an author of the report.