The Cost of Complying With Everything!


Nobody ever said following the rules was cheap. In 2005 organizations will spend nearly $15.5 billion on compliance-related activities, according to a study by AMR Research ( www.amrresearch.com ). The amount could grow to $80 billion over the next five years.

Not surprisingly, the largest line item (for complying with rules ranging from the Sarbanes-Oxley Act of 2002 and Food and Drug Administration regulations to the Health Insurance Portability and Accountability Act of 1996 and document and record retention requirements) was internal staff costs. Technology spending was second; it represented some 42% of HIPAA compliance expenditures. The most expensive initiative? Sarbanes-Oxley, which eats up 39% of all compliance spending.

The high costs have caught some companies by surprise. In 2004 almost two-thirds had to pull money from other areas to help fund compliance projects.

SPONSORED REPORT

Revenue recognition: A complex effort

Implementing the new standard requires careful judgment. Learn how to make significant accounting judgments and document them and collaborate with peers for consistent application.

VIDEO

How to Excel pivot a general ledger

The general ledger is a vast historical data archive of your company's financial activities, including revenue, expenses, adjustments, and account balances. J. Carlton Collins, CPA, shows how to prepare data for, and mine data with, PivotTables.

QUIZ

News quiz: Taking an economic snapshot and looking to the future

Recent news included IRS actions that affect individuals and partnerships and a possibly influential move by a Big Four accounting firm.Take this short quiz to see how much you know about the news.