Mount St. Helena has gotten lots of attention recently,

but the financial markets may have an even bigger explosion with which to contend: The first set of annual reports detailing the state of companies' internal controls on financial reporting are coming due and early word is that they won't look particularly good.

As the deadline approaches for implementing the internal control rules in Section 404 of the Sarbanes-Oxley Act, concerns are mounting that early next year, many companies may reveal in their annual filings that they have fallen short of the law's requirements. In a late September speech, the Securities and Exchange Commission's chief accountant, Donald Nicolaisen, noted estimates that as many as 20% of companies may have to report material weaknesses in their internal controls on financial reporting.

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