Deal to help companies reduce Sarbanes-Oxley risk with stronger spreadsheet controls

Scotts Valley, CA - September 26, 2005 - Compassoft Inc, a software leader in automated Sarbanes-Oxley regulatory compliance initiatives and enterprise risk management (ERM), today announced the acquisition of UK-headquartered Spreadsheet Auditing Ltd, creator of the widely used EXCheckerT, a spreadsheet auditing application that discovers and reduces errors in spreadsheets that could lead to material misstatements in financial reports. The announcement was made at the Sarbanes-Oxley Conference & Exposition in Baltimore, MD where Compassoft is currently exhibiting.

"News stories abound about spreadsheet errors that have caused budget miscalculations, stock prices to drop, CEOs to resign, and the restatement of earnings," said Compassoft CEO Paul Bach. "The integration of EXChecker'sT powerful spreadsheet analysis capabilities into our existing enterprise financial control software enables Compassoft to provide a comprehensive solution for enterprise risk management."

Spreadsheet control deficiencies can be a major contributor to material misstatements. PricewaterhouseCoopers cautions in its landmark report, "The Use of Spreadsheets: Considerations for Section 404 of the Sarbanes-Oxley Act," that "understanding how spreadsheets are used and the adequacy of related controls is a critical part of management's assessment of the effectiveness of its internal control over financial reporting under Section 404."

With this acquisition, Compassoft brings to market the first enterprise-class Sarbanes-Oxley software solution to seamlessly combine auditing and change management control processes for spreadsheets, enterprise databases and Crystal ReportsT within highly-distributed computing environments. Until now, spreadsheet-auditing applications have been available only as stand-alone software products.

First Enterprise-Level Sarbanes-Oxley 302 and 404 Auditing Solution for the Discovery and Control of Spreadsheets, Databases and Crystal ReportsT

"Spreadsheet auditing is a critical, but often-under-performed internal control in the Sarbanes-Oxley compliance process," said Patrick O'Beirne, managing director of Systems Modelling Limited, and chair of the European Spreadsheet Risks Interest Group (EuSpRIG). "Public companies are beginning to recognize the high risk they run as the result of their reliance on spreadsheets that are error-prone and can easily be manipulated to commit fraud."

EXChecker'sT software reveals where spreadsheets are located, their level of complexity, whether or not they contain errors, the connectivity to other financial instruments, and who owns the spreadsheet.

Spreadsheet Auditing Visionary to Join Compassoft Management Team

Long before the public business scandals of Enron and WorldCom contributed to the passing of the Sarbanes-Oxley Act by the US Congress, Spreadsheet Auditing Founder Byron Baynham recognized that public companies required software applications to analyze spreadsheet models that would help auditors detect fraudulent or accidental errors before they found their way into corporate financial reports. Today, EXCheckerT provides feature-rich spreadsheet auditing and analysis capabilities that can significantly reduce the number of formulaic or logic errors, which if not caught in time may result in costly omissions of content and processes.

"Compassoft is very pleased to have Mr. Baynham lead its spreadsheet applications development efforts as a senior member of Compassoft's development management team," said Bach. "We carefully evaluated the spreadsheet auditing market, and determined that EXCheckerT is superior in capability and ease of use. We look forward to working closely with him to bring new software solutions to market."

"Compassoft's acquisition of Spreadsheet Auditing bridges the gap between enterprise financial information and spreadsheet auditing and compliance, and I am thrilled to be a part of such an historic deal," said Baynham. "From the beginning, EXCheckerT was designed to be a step above intrusive products that require an Excel-based plug-in. Now it will be the first such application to be integrated with an industrial-strength enterprise architecture."

EXChecker'sT current international customers include among others: CitiGroup, Deloitte & Touche, HP, Lloyds TSB, Ofgem, PricewaterhouseCoopers, Prudential, Sydney Futures Exchange, Tulane University and Tyson.

The Combined Technologies

EXCheckerT will be incorporated into the November release of CompassoftT. The Compassoft solution now provides a detailed inventory, change control and relationship mapping of all spreadsheets, databases and Crystal ReportsT throughout the organization. This visibility, integrity, and change management over key financial information sources enables enterprises to add powerful documentation, controls and testing to their Sarbanes-Oxley compliance process.

About Compassoft Inc

Compassoft Inc is a provider of enterprise risk management and regulatory compliance technology that automatically discovers, relates, compares, audits and reports on critical financial application information. CompassoftT reduces non-compliance risk and increases reporting accuracy by identifying, retrieving and documenting both visible and obscure sources of financial information stored on servers, desktops and notebooks distributed across the organization. Compassoft Inc, based in Scotts Valley CA, has won numerous awards for its technology and holds several US and international patents on its technology. For more information, please visit www.compassoft.com .

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