Sarbanes-Oxley (Sox) compliance is to become less of a headache, the head of the US Securities and Exchange Commission (SEC) has promised.
William Donaldson indicated new guidance from the SEC would make compliance projects “more efficient and effective.” Rising Sox compliance costs, Donaldson said, were a result of lack of focus.
“Costs may have been due to excessive or duplicative effort by management and auditors,” he said speaking to the Foundation Financial Officers Group last week. “Costs may have been driven by a lack of a clear risk-based focus.”
The move has been welcomed by some industry watchers.
“Mr. Donaldson clearly sees how important it is for all sides to get the focus of Section 404 right. We welcome his new emphasis on identifying material risk,” said Toby Grey, managing director of Anglo-French compliance company RVR.
“With the Foreign Registrant filing deadline pushed back to 2006, companies may feel that they can delay acquiring and implementing the necessary tools. Clearly, however, they can and should take action now,” he added.
In February SC published an article offering advice on how best to cope with compliance.