Knowledge Center
 White Papers
 Data Sheets
 eNewsletter
 Advisors Research
 
   

Thursday, March 10, 2005

Time to reassess 404 compliance

Dual-listed companies should take time to reassess their compliance programmes for section 404 of the Sarbanes-Oxley Act, experts have warned.

The advice comes after the decision to extend the deadline for non-US companies by a further year.

Last week the US Securities and Exchange Commission, headed by William Donaldson, announced that companies registered with the body but listed in other countries now have until their financial year ending on or after 15 July 2006 to comply with section 404.

Before this policy change, many UK companies were rushing through a compliance programme to meet the tight deadline.

'Given the burdens in designing and implementing Section 404 compliance for smaller and non-US companies, this extension strikes the right balance,' said SEC's director of corporation finance Alan Beller. 'Companies should use the extension to improve the quality of their efforts.'

With an additional 12 months to meet the stringent requirements of section 404, which demands company directors and auditors make public statements on the effectiveness of internal control, businesses are being advised to take advantage of the breathing space and look at the direction their projects are going in.

'Now is the time for companies to step back, look at their plans and decide if it is still the best way forward,' said Fiona Sheridan, director in business risk services at Ernst & Young.

But she warned that this process must not be dragged out and cause compliance programmes to drift.

'If, companies begin trying to maximise value from the project, it could cause a loss of momentum,' Sheridan said. 'Objectives could shift and they could become complacent.'

posted by Anonymous @ 9:04 AM   0 comments

0 Comments:

Post a Comment

<< Home

 

Powered by Blogger