SOX Center

Spirent Communications is dropping its New York listing because of the high costs of meeting the Sarbanes Oxley regulations on corporate governance.

The communications technology company said in a statement: “The US listing has become significantly more costly and onerous in recent years, not least due to the imposition of the Sarbanes Oxley regulations.”

The New York listing costs £3m a year which Spirent believes is “disproportionate to the actual or potential benefit in maintaining the US listing”. Spirent will maintain its London listing.

The Sarbanes Oxley regulations were introduced after the collapse of Enron in 2001 in a bid to improve corporate governance.

However, many businesses have complained that the regulations are too time-consuming and costly. Spirent plans to return an additional £50m to shareholders on top of its current £50m buyback programme.

Telegraph.co.uk: Spirent scraps New York listing

The new world of corporate governance, in the view of Securities and Exchange Commissioner Roel Campos, is one in which Sarbanes-Oxley rules governing companies become more commonplace and affordable as shareholders continue to demand and receive more say over how companies are run.

“It’s what I see,” Campos said of the democratization trend with shareholders in a speech to the Philadelphia Chapter of the National Association of Corporate Directors Tuesday. “I don’t think there’s anything to fear. It’s here to stay. Activists are going to be involved and try to influence decision-making.”

He outlined what he saw as growing opposition to staggered boards and poison pills, which make companies more resistant to takeover bids. He also expects to see more companies move to majority voting on boards, rather than the plurality that is now the standard, requiring only that a director get more shareholder votes than others to be elected.

Business Journal: SEC commissioner: Shareholder rights activism ‘here to stay’

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

Financial reporting is changing around the world and the implications are even being felt across the pond

When a tide turns you can hear, down on the foreshore, a huge noise. It is the sound of pebbles being pulled this way and that as the waters change direction. Journalists love the idea of tides turning. It is a wonderful metaphor and an easy one to use. But often when we speak of tides turning we are describing an idea rather than a process. Often we are describing something which we think ought to come about rather than something which is actually happening. Often the roar of pebbles being upturned in a changing flood of water is missing.

But I do think that when it comes to describing what is happening in the world of American financial reporting and regulation we can genuinely say that the tide is turning. There is a distinct sound of turmoil down on the foreshore.

AccountancyAge/Robert Bruce: Corporate governance - Ripple effect

Japan imposing new financial controls framework similar to Sarbanes-Oxley

Japanese companies and their international subsidiaries have started prepping for next year’s implementation of a corporate governance framework that’s comparable to the requirements imposed by the Sarbanes-Oxley Act in the U.S.

Many U.S.-based IT managers have started working on processes to ensure compliance with the emerging financial controls requirements, informally known as J-SOX, even though initial details aren’t expected until next month.

“This is just like the early stages of Sarbanes-Oxley — nobody really knows” the specific requirements yet, said Michael Pellegrino, vice president of IT at Fuji Photo Film U.S.A. Inc., a Valhalla, N.Y.-based subsidiary of Tokyo-based Fujifilm Corp.

Computerworld: IT Braces for ‘J-SOX’ Rules

Think your private company is safe from new, stricter auditing standards because you’re not subject to Sarbanes Oxley? Feeling smug because you’re not experiencing the hassle and expense of SOX compliance? Thought you’d escaped the pain by taking your public company private?

Not so fast! Your time may have come: Statements of Auditing Standards 104-111 have arrived. These new standards affect every nonpublic company that needs an audit — whether it’s for bankers, insurers or shareholders. And they’re effective for financial statements for periods beginning on or after Dec. 15, 2006.

South Florida companies in all industries will be affected.

The good news is that, like SOX, these new standards are designed to help improve corporate governance, which could protect your company from risk. The new standards, dubbed ‘’risk assessment standards,'’ not only require your auditors to develop a better understanding of your internal controls and assess whether those controls would work if they were functioning as designed — they also require full documentation of these controls. The goal is for auditors to follow more specific protocols to support their opinions on whether financial statements are free from material misstatements.

MiamiHerald: New standards affect companies missed by Sarbanes Oxley

The ICAEW, supported by the Confederation of British Industry, will today call on US regulators to ‘mutually recognise’ the rigour of British accounting standards, rather than try and impose the US system on British headquartered and regulated companies.

According to the Daily Telegraph, both organisations will be represented at a round table debate of senior accounting and auditing figures, regulators and corporate leaders from both the UK and US in London.

Richard Lambert, the CBI’s director general and Robert Hodgkinson, the institute’s technical director, will speak alongside their colleagues from the US against the rules-based approach coming from Washington in the wake of Sarbanes-Oxley and other corporate governance measures.

AccountancyAge:ICAEW to call for more US recognition

Jim Clark, co-founder of internet icon Netscape Communications, has resigned as chairman of online photo site Shutterfly saying that Sarbanes-Oxley corporate governance regulations had ‘gone too far’.

In a letter to management released in a regulatory filing, Clark said one reason for him resigning was due to constraints imposed on major shareholders by the Sarbanes-Oxley securities law.

AccountancyAge:Internet pioneer hits out at Sarbox rules

Business has won the battle to ease one of the most controversial requirements mandated by the Sarbanes-Oxley corporate-reform law: that companies first review their own systems for ensuring accurate financial reports and then have them tested by outside auditors.

The nation’s business lobby, which says Sarbanes-Oxley is too burdensome, would like to see even broader changes in the law, which was passed in the wake of the Enron scandal to promote good corporate governance and prevent fraud. Democrats’ success in Tuesday’s congressional elections makes wholesale changes in the statute less likely.

But securities and accounting regulators are yielding to pressure for a more flexible reading of a provision of the law known as Section 404. Regulators have said they will propose guidance next month to help companies and auditors interpret Section 404 in a way likely to save them time and money.

That’s a big victory for business, which has mounted a concerted push to alter the regulation. It could also be good news for U.S. stock exchanges, which in recent years have blamed Sarbanes-Oxley, and particularly Section 404, for discouraging companies from going public in the U.S. or listing stock here.

Business Wins Easing of a Sarbanes-Oxley Rule

The Committee on Capital Markets Regulation, a newly formed independent group of U.S. business, financial, investor and corporate governance, legal, accounting and academic leaders, announced today that it will conduct a major study of how to improve the competitiveness of the U.S. public capital markets. It plans to issue a report with recommendations to key policy makers for specific changes in regulation and legislation by the end of November.

“I am pleased to learn The Committee on Capital Markets Regulation, an independent group of highly-respected leaders in each of their fields, will examine the competitiveness of the U.S. public capital markets,” said Secretary of the Treasury Henry Paulson. “This issue is important to the future of the American economy and a priority for me. I look forward to reviewing their findings and ideas.”

New Independent Non-Partisan Committee to Study Capital Markets Regulation and Make Recommendations to Key Policy Makers.