Risk managers can play an important role in complying with corporate disclosures required by the federal Sarbanes-Oxley Act, though few do today, according to a survey of risk managers taken by a consulting firm.

David Bradford, editor-in-chief for Advisen, wrote in a report that the company's study found those firms that involve risk management in the compliance process receive great benefit from its inclusion. Sarbanes-Oxley, known also as the Public Company Accounting Reform and Investor Protection Act, took effect in 2002.

Advisen consulting group, out of New York, asked 6,500 risk managers to take part in an online survey during the last week of July. Of the responses, 215 came from publicly held companies and 87 from nonpublic firms that comply with the internal control rules.

Almost 73 percent of the risk managers said their departments are not involved with the committee or teams that oversee Sarbanes-Oxley compliance. Almost 74 percent do not play a role in auditing, monitoring or collecting data for compliance.

Interestingly, more than 50 percent of the risk managers are happy with that situation.

However, 24 percent said implementation of enterprise risk management programs was spurred by Sarbanes-Oxley compliance requirements.

Mr. Bradford writes that the role of the risk manager in Sarbanes-Oxley remains an “evolving story” as federal regulators still work to clarify requirements.

However, he said, “based on respondent's comments, risk managers of those companies that have most thoroughly integrated the risk management function into the Section 404 compliance process are experiencing material benefits.”

Section 404 of Sarbanes-Oxley mandates the assessment of internal controls by the company. The company's auditor is required to attest to, and report on the assessment.

The complete report, “SOX Appeal: Sarbanes-Oxley Section 404 Compliance and the Risk Management Department,” is available to Advisen subscribers. Others can purchase the report by calling 212-897-4800.

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