Press Release

May 9, 2003

CEO Counselors Releases Analysis of Sarbanes-Oxley Act on Information Technology

Tampa, FL and Chicago, IL – CEO Counselors released their analysis of the actions that CEOs, CFOs and CIOs will need to take to ensure compliance with the Sarbanes-Oxley Act of 2002. Beginning with the annual reports filed for the year 2003, executives will have to affirm that their internal controls produce reports that investors and regulators can rely upon.

The history of major Information Technology projects is replete with projects that were late, over-budget, failed to provide the functionality requested or simply did not work. Analysis of past projects shows that 75% fail in one or another of these ways. In addition, many organizations justify the projects based on visions of greater sales or reduced costs that do not occur.

If an organization has set expectations based on anticipated results from technology projects that fail to perform, the senior executives may be subject to Federal prosecution for securities fraud.

The law, “Directs the SEC to require by rule that annual reports include an internal control report which: (1) avers management responsibility for maintaining adequate internal control mechanisms for financial reporting; and (2) evaluates the efficacy of such mechanisms.”

CEO Counselors has developed a methodology for auditing the processes, measures and systems in place at a firm to provide management with the reports needed to determine if the internal controls over IT activities are adequate or not.

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