Sarbox compliance seen as positive

UK companies coped well with the first year of
Sarbanes-Oxley compliance and are even beginning to see some business benefits
of adopting the onerous regulation.

Despite this, compliance with the requirements of the Act has still been a
costly and time-consuming experience, according to a survey carried out by
PricewaterhouseCoopers: Sarbanes-Oxley One Year On ­ Evaluating experiences with
Sarbanes-Oxley, which sought the views of more than one-third of all UK-based
foreign private issuers registered with the SEC.

The research into the 22 FPIs found that respondents were generally quite
positive about the adoption of Sarbox, claiming it had led to greater awareness
of financial controls and led to wider benefits such as process and control
improvements.

Despite the positive aspects, however, more than three-quarters of
respondents reported an excessive number of key controls and documentation. More
than one-third said they had tested more than 2,000 key business process
controls.

“There are clear indications that significant progress is still required,”
said Helen Nixseaman, a partner in the risk assurance division of PwC. “In
particular, the main opportunity to streamline year-two efforts lies in a
greater use of a top-down approach to focus on key controls and in how companies
interpret new US guidance. This top-down risk-based approach is proving a real
challenge.”