SOX Center

South Korea’s Financial Supervisory Commission, or FSC, said Tuesday it has signed a pact with a U.S. accounting body for joint inspection and investigation of Korean accounting firms that audit local companies listed on the U.S. bourses.

The agreement with the Public Company Accounting Oversight Board, or PCAOB, was spurred by the Sarbanes-Oxley Act in the U.S., which requires all accounting firms auditing corporations publicly traded in U.S. markets to register with the board and to undergo its inspections regularly, according to a statement by the FSC.

Morningstar.com: S Korea FSC, US Accounting Body Agree On Joint Watch On Accounting Cos

The U.S. Chamber of Commerce has launched a new center dedicated to lobbying Congress to ease Sarbanes-Oxley requirements and “strengthen the competitiveness of U.S. capital markets.”

The Center for Capital Markets Competitiveness (CCMC) was announced last week during the Chamber’s Capital Market Summit.

The Chamber represents 3 million businesses and wants to see the rules relaxed, but its summit Securities and Exchange Commission Chairman Cox said he opposes weakening the law.

“We don’t need to change the law,” Cox said. “We need to change the way it is implemented.”

In a statement, the Chamber said the new center will address domestic and international securities regulation, as well as challenges to the auditing profession, proxy rules, business due process, and a host of other issues.

SmartPros: U.S. Chamber Launches New Center

Comments about proposed changes to the controversial Sarbanes-Oxley law rolled in for a final day Monday, as debate about how best to implement it continued.

Monday marked the closing of the comment period for rules proposed in December by the Securities and Exchange Commission and the Public Company Accounting Oversight Board that aim to streamline Section 404 of the 2002 corporate-governance law. The section requires both management and outside auditors to sign off on a company’s internal financial controls.

But some commentators said the auditing provision could be tweaked even further.

“The rules and standards related to the implementation of Section 404 of the act still require significant attention,” said Grace Hinchman, senior vice president of government affairs for Financial Executives International, in a statement. The group is suggesting changes including allowing for “rotational” testing of controls that have operated effectively in the past.

MarketWatch: Further tweaks urged for Sarbanes-Oxley

A global survey of 800 internal audit chiefs has revealed that the pressures of regulatory compliance have compromised their ability to complete thorough audits.

The research – whose respondents were from North America ( 51%), Europe (17%), Latin America (15%), Asia-Pacific (9%), the Middle East (8%) and Africa (55%) - produced by business analysis firm ACL Services, highlighted the need for companies to continuously monitor their internal controls.

Amidst compliance deadlines, key managers were pulled in from various parts of companies to work on meeting the deadlines, causing monitoring of other areas of business to be neglected.

• The survey of companies, with revenues ranging from $500m (£261m) to over $10bn, revealed that:
• One in five audit executives felt their department’s independence was compromised by their involvement in compliance programs
• A total of 36% of organisations have adopted a continuous auditing approach across either all or within select business processes
• 39% plan to implement continuous auditing in the near future
• A shortage of skilled internal audit staff was identified as the most critical challenge to fulfilling the internal audit mandate (68 percent)
• Other major global challenges identified were the complexity of the IT environment (65%) and the lack of ownership for controls and related risk (62 percent)

President and CEO of ACL Services Harald Will, said a major concern was that the independence of internal audit was especially compromised by the manual effort of compliance.

‘Many felt technology could be applied to overcome this, but the challenge of the shortage of skilled staff also came up.

‘Whether it was a Sarbanes-Oxley deadline or something else, there is panic as the deadline looms. Staff are pulled in from other parts and then rush to complete filing and attempt to return to business as usual.

AccountancyAge:Internal audit compromised due to regulatory burdens