UK Subsidiaries Of US Firms Brace For Sarbanes-Oxley

by Robin Pilgrim, LawAndTax-News.com, London

23 May 2003

A report recently released by AMR Research has warned that UK subsidiaries of US companies may need to implement substantial IT infrastructure changes in order to comply with the terms of the Sarbanes-Oxley corporate governance act.

According to AMR: '85% of companies predict that [the Act] will require changes in IT and application infrastructure that support the business, which could potentially reach into the bowels of the company.'

The report revealed that sections 404 and 409 of the act are the most likely to require IT system changes in order to come into compliance with the US' new corporate governance rules.

These provisions respectively require companies which are listed on the US markets to certify reporting and associated controls by the end of 2003, and oblige companies to report events which could affect the financial performance of the company within two days. However, there is not yet a deadline for the implementation of the latter rule.

Speaking to the UK media this week, John Hagerty, the report's co-author, observed that:

'If you're a subsidiary of a US firm, you're going to be touched in several ways. You'll see a lot of work done to streamline business process systems all the way back to source systems.'

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