A survey of IT executives in the U.S. has shown that nearly half of all companies anticipate they will fail to achieve Sarbanes-Oxley message retention requirements by July 2006 deadline. Failing to meet the deadline can result in jail time for company executives, as well as hefty financial fines.
According to SOX Section 404, public firms are required to log and archive electronic communications like instant messaging and email upon request. The survey showed that less than third of the executives felt they would be able to meet the deadline for archiving messages.
The major barrier for businesses is the cost of SOX compliance. Archiving electronic communications requires additional storage capacity. Researches have show than businesses will spend nearly $15 billion this year in order to adhere to new compliance regulation.
“It’s alarming that almost half of the companies in our survey anticipate they will fail to meet the message retention requirements set forth in the next year’s SOX deadline, even with 10 months still remaining to get their systems in place,” said Francis Costello, chief technology officer at Akonix.
“Businesses must realize that by not logging and archiving all electronic communications, including IM, it can result in corporate legal liability. Rulings from regulatory agencies encourage organizations to regularly disclose policies for email management and IM services, but many popular software applications aren’t equipped with features for enforcing compliance, which leads some organizations to neglect or ignore their own policies.”
The survey, sponsored by Akonix, questioned 157 executives from small-to-medium businesses across the U.S.