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Reform Prompts Accounting Changes
MENLO PARK, Calif. -- Reform in the accounting profession has compelled nonpublic companies to take a closer look at their financial and accounting practices, and many are implementing changes voluntarily. In a recent survey of privately held businesses, 48% of chief financial officers said they have made adjustments to their firms' accounting processes since the introduction of new regulations. Respondents cited payroll and benefits as the most frequent areas of change.The survey was developed by Robert Half Management Resources, a provider of senior-level accounting and finance professionals on a project and interim basis. It was conducted by an independent research firm and includes responses from 1,359 CFOs from a stratified random sample of U.S. private companies with more than 20 employees.CFOs were asked, "In which of the following areas, if any, has your company made changes to its current financial accounting and reporting processes in light of regulations such as the Sarbanes-Oxley Act of 2002?" Among the 48% who cited a specific area of change, their responses were payroll/benefits, 44%; expenditure/purchasing, 37%; accounts receivable/sales, 31%; capital assets, 31%; conversion/inventory, 31%; credit management/collections, 29%; disbursements, 25%; financial close, 22%; and other, 3%. Multiple answers were allowed on the question.Of the 1,359 CFOs polled, 52% indicated they have not made any changes in the above areas. In a March 2003 RHMR survey of private companies, 44% of CFOs said their firms had reviewed or made changes to current accounting procedures in light of new corporate governance standards."Even though private businesses are not legally required to comply with regulations such as Sarbanes-Oxley, many firms are looking at their high exposure areas with increased scrutiny," said Paul McDonald, executive director of RHMR."As a result, nonpublic companies are reviewing wages, salary and bonuses, as well as medical and other employee benefits such as phantom stock options, as though they were publicly traded."McDonald added that private firms recognize the need to make sure their accounting practices are in order."Companies of all sizes are taking measures to prevent costly errors or potential fraud across all financial functions within an organization," he said.RHMR has locations in major cities throughout North America, Europe and Australia, and offers online job search services.Visit Robert Half Management Resources at www.rhmr.com."