SOX Center

Japanese insurer Millea Holdings Inc. (8766.T) said on Thursday it will voluntarily have its shares delisted from the U.S. Nasdaq market and stop reporting its earnings under U.S. accounting rules to save costs.

Millea, a holding company with both life and non-life insurance operations, also announced plans to buy back up to 7 million of its own shares, or 31 billion yen ($253 million) worth. That is equal to about 0.8 percent of its outstanding shares.

Several foreign companies have recently delisted their shares from U.S. exchanges due to the high cost of maintaining a listing and complying with the Sarbanes-Oxley Act, a set of tough accounting laws enacted to combat fraud after the Enron scandal.

Yahoo!.com: Japan insurer Millea quits Nasdaq, U.S. accounting

Critics of the 2002 Sarbanes-Oxley act say the bill’s post-Enron/WorldCom accounting reforms have made U.S. capital markets less competitive with those overseas. It’s no surprise that one of its authors, former U.S. Rep. Michael Oxley, says that’s hardly the case. Oxley says recent refinements to the section of the act requiring companies to monitor internal financial controls and accounting are improvements, but he doesn’t believe SOX, as it’s commonly known, was crippling U.S. businesses.

Oxley was in Houston recently to talk to clients of law firm Baker Hostetler, where he now works in an Of Counsel role.

He talked to the Chronicle’s Tom Fowler about SOX’s legacy, the collapse of Arthur Andersen and why bankers may be more to blame for the high cost of going public.

chron.com: Oxley says reforms’ effects overblown

The Department of Labor’s Administrative Review Board has ruled that a whistleblower’s accusations were not protected under the Sarbanes-Oxley Act whistleblower protection provision, CFO.com reports.

David Welch, former CFO of Virginia bank Cardinal Bancshares, in 2004 was the first person to win whistleblower protection under SOX. Welch said the bank fired him after he raised questions about the bank’s accounting policies and internal controls. In June 2006, a Labor Department judge ordered that the bank reinstate him and restore pay and benefits.

The bank appealed, leading to this most recent ruling by the Labor Department’s appeals board.

SmartPros: First SOX Whistleblower Loses Case

Increased regulatory pressures and the fear of sanctions for failure to comply are making FTSE-350 FDs reluctant to relinquish control over sensitive finance and accounting functions

The burden of handling regulatory and compliance issues has become a major obstacle to outsourcing finance and accounting business functions, according to research among UK finance directors.

The survey of 50 FDs from UK FTSE-350 companies by LogicaCMG has found that FDs believe that increased regulation and a greater emphasis on corporate governance are the biggest barrier to outsourcing. Only 7% currently outsource any finance and accounting functions, with 68% stating that the burden of current financial regimes is holding them back.

Accountancy Age: Compliance stifles outsourcing

A Businessman Who Keeps the Books

For thousands of investors and executives at publicly traded companies, Conrad W. Hewitt may be one of the most important Washington civil servants they’ve never heard of.

The chief accounting guru at the Securities and Exchange Commission, Hewitt stands at the center of numerous burning policy debates — from how far to cut back on corporate reforms imposed after the Enron debacle to which executives are to get punished for manipulating their companies’ numbers.

Hewitt, 70, came to the job last August in the twilight of a long career as a California banking regulator and a partner at Ernst & Young, one of the nation’s four largest accounting firms. “I thought it was a great opportunity to cap my career,” he said.

But the major influence on Hewitt’s thinking may be his service as a board member at 10 companies, many of which spent millions of dollars complying with costly provisions in the 2002 Sarbanes-Oxley Act which imposed financial and governance strictures on businesses and their accountants. One of his associates back then called the process “an exercise in futility.”

WashingtonPost.com:A Businessman Who Keeps the Books

The Federal Reserve Bank of New York has issued a paper describing a number of sound practices for financial and accounting controls at financial institutions. Weaknesses in these controls can contribute to inaccurate or incomplete financial reporting and potentially result in legal fees and fines, significant reputational damage and a loss of business.

pdf: Financial And Accounting Controls: Industry Sound Practices For Financial Institutions

The Netherlands’ biggest companies are asking their accountants not to apply US accounting rules too stringently, in order to reduce their bills, the Financieele Dagblad reports on Tuesday. The paper says telecom firm KPN and five other AEX companies have already met the big accountantcy firms asking for a ‘Dutch interpretation’ of the rules of the Sarbanes-Oxley Act.

They want the accountants to harmonise their approach to the US rules, which are currently open to different interpretations.

KPN says the most ‘optimal’ application of Sarbanes-Oxley would cut its accountancy bill by 30%. In 2005 the company spent €14.6m on accountants fees, the FD reports.

DutchNews.nl: Big firms want harmony on Sarbanes-Oxley