Friday, July 14, 2006
Sarbanes-Oxley Goes Global
Europe has been experiencing an outbreak of Sarbanes-Oxley panic. As exchanges merge and more trading moves online, it's not always clear who should have regulatory power. The head of Britain's Financial Services Authority, Callum McCarthy, ignited controversy in June when he suggested that British firms might be subject to U.S. regulation if Nasdaq acquired the London Stock Exchange.
The New York-based exchange has built a 25% ownership stake in its British rival. "That has just sent a shiver down the collective spine of Europe," says Jim Kim, editor of FierceSarbox.com. "European companies, especially, really are just chafing at the mere prospect that they will someday have to comply with Sarbanes-Oxley."
For those companies listed in the U.S., however, the threat is already real. Most foreign firms have fiscal years ending Dec. 31, and they don't have to submit their compliance reports for another six months after that. Nevertheless, preparation began two years ago at many companies, according to Robert Lipstein, a partner at auditing firm KPMG.
posted by Brian Moran @ 9:43 AM