Last year, widely publicized customer data breaches, as well as food and toy safety issues related to Chinese suppliers, heightened risk management concerns for the retail industry. This year, according to the annual study performed by BDO Seidman, LLP, one of the nation’s leading accounting and consulting organizations, 44 percent of chief financial officers (CFOs) at leading U.S. retailers stated that they have increased their level of investment in cyber security to combat potential data breaches, down from 61 percent in 2007, indicating a growing comfort with the protective systems in place.

By comparison, one quarter (25%) of the CFOs say their company has increased the level of personnel and financial resources they devote to risk management for supplier and vendor activities, down from 32 percent in 2007.

The remaining 75 percent cite that their resources have stayed the same. The majority (90%), however, have not made any changes to vendors or supply chain relationships as a result of product and food safety concerns.

"Two major issues plaguing retailers last year were product safety and cyber security. After the spate of product recalls in 2007, there was a flurry of demand to move product sourcing away from China. Realistically, however, retailers would have been pressed to change their sourcing overnight as supply chains are complex and expensive to establish. Instead, retailers have been more focused on enforcing safety standards and working with regulators to ensure that consumers are protected," said Ted Vaughan, a partner in BDO Seidman’s Retail and Consumer Products practice. "When considering cyber security, many have invested heavily in deterring data breaches over the past two years and, consequently, most retailers are more confident in their protective measures this year."

These findings are from the most recent edition of the BDO Seidman Retail Compass Survey which examined the opinions of 100 chief financial officers at leading retailers located throughout the country. The retailers in the study were among the largest in the country, with revenues of more than $100 million, including 24 percent of the top 100 based on annual sales revenue. The survey was conducted in August and September of 2008.

Some of the major findings of BDO Seidman Retail Compass Survey of CFOs:

* Retailers Careful with Credit Card Information. Nearly half (47%) of retailers report that they do not maintain customer credit card information. Of those who do keep credit card information, 61 percent conduct periodic reviews of inactive accounts in order to remove inactive card holder data. Most of the retailers (96%) who do review inactive accounts do so annually.

* More Retailers Go Green. The majority (76%) of the retailers are actively involved in green practices, which is up by nine percent from 2007. When looking at the top 100 retailers, 83 percent report being actively involved in green practices, which was consistent with the 2007 survey findings.