Thursday, May 04, 2006
Non-US companies struggle to make Sarbanes-Oxley compliance sustainable in the longer term
Non-US companies that are required to comply with Section 404 of the Sarbanes-Oxley legislation for the first time this year, are so focused on the year one deadline that they are struggling to make the process sustainable for the future, according to a new survey from PricewaterhouseCoopers.
The survey 'Looking forward: evaluating early experiences with Sarbanes-Oxley' of some 36 Sarbanes-Oxley project leaders from large foreign private issuers (FPIs) suggests that the experiences of companies in the US, which struggled to embed compliance in year one, risk being repeated by FPIs.
There is a real danger that the excessive costs of compliance in year one will recur in following years unless companies take steps now to stand back and review the robustness of their controls and compliance structures.
Well over a third (44%) of respondents view their Section 404 compliance efforts as an entirely discrete piece of work, unconnected to other compliance activities and processes happening within the business. Although creating 'controls consciousness' is considered to be a medium-to-high priority for 86% of those surveyed, 31% state that this has not to date been gauged within the company. Similarly only 19% of respondents say that a formal mechanism exists for knowledge transfer from their Section 404 project team to management.
posted by Brian Moran @ 9:53 AM