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Compliance and the Director

Compliance and the Director

by Rick Turoczy on July 20, 2006

Today, that responsibility starts and frequently stops with the Directors. There is no mystery as to why this should be the case. The Enron, Tyco, WorldCom and Parmalat fraud scandals serve to bring compliance to the forefront of boardroom agendas. In each case, there was a clear connection between what the business did and the accounting of those activities. What is more, the recent wave of regulations affects every aspect of the business. Here I am thinking about both Sarbanes-Oxley and the new International Accounting Standards.

Sarbanes-Oxley is often characterised as a standard that only applies to US companies. However, any company that conducts business or is required to file financial and governance reports in the US will have Sarbanes-Oxley issues. Therefore, it is no surprise that Directors find themselves in the unenviable position of not only being master of the corporate purse strings but also as compliance gatekeepers. This need not be a bad thing.

Compliance and the Director

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