"During this time of widespread shareholder distrust, the market provides evidence that many investors perceive earlier release times to indicate well-run financial operations," said Rick Fumo, senior vice president, practices of
Parson Consulting.

Yet, regardless of when they release their earnings to the public, large U.S. companies are taking longer to file their annual 10K financial report than upcoming Securities and Exchange Commission (SEC) guidelines favor. Nearly 49 percent of U.S. companies listed on the S&P 500 roster don't meet the shorter 10K filing deadline of 75 days for 2003, while 86 percent don't meet the 2004 cut-off date of 60 days. The SEC has reduced the filing cycle by one-third in an effort to make important financial information available to investors more quickly.

 

Other study findings revealed:

"The research demonstrates a real need for companies to make internal changes to reach the abbreviated deadlines," said Fumo. "Ultimately, the goal of the abbreviated deadline is to restore confidence in the capital markets through enhanced accessibility of financial information. While doing that, management reaps the benefit of more timely information on which to base critical decisions."

 

Companies that must retool their reporting systems to meet these deadlines are already facing significant costs. More than half of the companies' finance budgets have increased by up to 20 percent, and senior finance executives are adding an average of three extra hours to their workweek to comply with and make sense of the Sarbanes-Oxley Act, another recent study by Parson Consulting indicated.