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Tuesday, October 25, 2005
Manual processes must be automated to cut cost of Sarbanes-Oxley audits
When Phillip Bennett, head of the US-based hedge fund giant Refco, was suspended earlier this month after his company announced a £240m accounting irregularity, it was a wake-up call to everyone involved in corporate compliance.
Not only has Bennett been charged with fraud, but Refco was also forced to admit its financial statements for the past four years "should no longer be relied upon". Part of the group was put into receivership and its core futures brokerage is being sold off.
The headlines proclaimed it the worst financial scandal since Enron and WorldCom, and its impact is likely to see a tightening of corporate governance regulations around the world.
Even before Refco, it was clear the clean-up of US financial reporting ushered in by the Sarbanes-Oxley regulations in 2002 would be mirrored elsewhere.
Sarbanes-Oxley covers firms with US stock market listings, but it has raised the compliance bar globally, with company shareholders and the financing banks now wanting to see firms managing their risks more effectively and transparently.
posted by Anonymous @ 8:47 AM
 
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