In the article, the fifth anniversary of the Sarbanes-Oxley Act is discussed, highlighting both its positive and negative aspects. Several deficiencies and challenges are identified, carrying significant implications for auditors and requiring a considered response.

One significant issue highlighted in the article is the substantial cost associated with Sarbanes-Oxley compliance. Public companies in the U.S. have collectively spent over $26 billion on compliance-related expenses, covering staffing, consultant fees, and technology. Auditors must acknowledge the financial burden on organizations and assess the cost-effectiveness of these compliance measures.

The article also emphasizes documentation gaps found during internal control reviews at some companies, like Invitrogen Corp. Auditors need to be vigilant regarding these documentation issues as they can impact financial reporting accuracy and reliability, necessitating thorough reviews.

Another challenge pertains to the disclosure of "material weaknesses" in accounting and restatements of financial results, which were common initially after Sarbanes-Oxley's enactment. Auditors should scrutinize these disclosures and restatements to ensure appropriate corrective actions have been taken, aligning financial reporting with established reliability standards.

Additionally, the decreasing number of restatements and weakness disclosures in recent years is a significant audit consideration. Auditors should investigate the reasons behind this decline to determine whether it signifies improved internal controls or reduced transparency within organizations.

Despite these deficiencies, it's crucial to recognize the positive impact of Sarbanes-Oxley on corporate governance, accountability, and financial reporting. Auditors should appreciate the importance of these safeguards in bolstering investor confidence and maintaining financial statement integrity.

In response to these challenges, auditors must conduct comprehensive assessments of a company's Sarbanes-Oxley compliance and internal controls. This includes evaluating the cost-effectiveness of compliance measures, carefully reviewing documentation and material weakness disclosures, and staying vigilant for indicators of financial irregularities. Furthermore, auditors should acknowledge the broader influence of Sarbanes-Oxley in enhancing corporate governance and restoring investor trust in financial markets, framing their response within the context of regulatory reform and accountability.