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No escape from the escalating cost of Sox

No escape from the escalating cost of Sox

by Rick Turoczy on November 29, 2004

European companies with a listing in the US are up in arms over the cost of complying with the Sarbanes-Oxley Act. In common with many US businesses, they are especially exercised about the requirements of Section 404 on internal control.

Yet there is a curious aspect to this backlash. For as Lynn Turner, former chief accountant at the Securities and Exchange Commission, points out, Section 404 does not mandate a single new control beyond those already mandated by Congress in 1977 in the Foreign Corrupt Practices Act. Nor is there anything that goes beyond the Treadway Commission’s recommendations in 1992 on internal control, which have long been regarded in the US as best practice.

Part of the problem is that the enforcement climate is tougher. Auditors, with the Public Company Accounting Oversight Board at their back and the demise of Andersen playing on their nerves, have also become hyperactive on the internal control issue.

No escape from the escalating cost of Sox

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