The Hindu Business Line : Sarbanes-Oxley legislation: US panel looking at easing cost of compliance

COMPLIANCE to the US Sarbanes-Oxley legislation may turn out to be "less onerous" in the coming days for small businesses that have or plan to raise capital from the US.

"The Small Business Advisory Committee of the US Securities and Exchange Commission (SEC) is looking at the cost of implementing Sarbanes-Oxley requirements for small businesses. They don't want it to be onerous," Mr Mike Starr, Director of Global Risk Management, Grant Thornton International (GTI), told Business Line here.

Grant Thornton is the fifth largest accounting firm in the US. Mr Starr is also Chair of the American Institute of Certified Public Accountants' (AICPA) special committee on Enhanced Business Reporting.

Commenting on the Sarbanes-Oxley requirements, Mr Starr said that Grant Thornton believes that Sarbanes-Oxley has been beneficial even though corporates may complain that Sections 404 requirements (internal control) have been expensive and time-consuming to implement.

"The real purpose of Sarbanes-Oxley was to restore integrity to financial reporting process and we believe this objective has been accomplished. The managements are more accountable and audit committees now own the audit process. Sarbanes-Oxley gives responsibility to audit committee to control the audit process," he said.

Mr Starr highlighted that the SEC and other regulators are sensitive to the perception that was gaining ground (outside the US) that the US is no longer a good place for raising capital.

"The regulators are sensitive to this. I don't think you will see loosening of the Sarbanes-Oxley requirements. But you will see an attempt to establish an appropriate cost-benefit relationship. They may make them less onerous for small businesses," he said.

Liability reforms

Liability reforms in the US and other countries are a must if auditors have to take more responsibility in the detection of frauds in companies that are audited by them, according to Mr Starr.

He was of the view that auditors would have to in the coming years take more responsibility for detection of frauds in the companies audited by them. "The market place is demanding this from the auditors. Currently, the risk-reward ratio is not in the favour of the auditors. There is need for liability reforms," Mr Starr said.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Hotel Leelaventure may acquire property in South

HMT deal with ONGC, MRPL

Sarbanes-Oxley legislation: US panel looking at easing cost of compliance

SEBI looking into letters sent by Anil Ambani

Infosys, Wipro among top 5 most valuable outsourcing cos

Ford India, GMAC on Crisil rating watch

Volkswagen decides on Vizag: AP Minister

Vishal Exports to invest Rs 450 cr in wind farm project in S. India

Tata Motors serves an Ace in 3-wheeler space

ONGC urges for subsidy fund to reduce burden