It is highly complex and generally requires all annual financial reports to include an ‘ICoFR (Internal Controls over Financial Reporting) Report’ for management to sign off and all annual financial reports for companies with a market capitalisation of £75m or above to include external auditor attestation. Section 404 of the Sarbanes-Oxley Act relates to the ‘Management Assessment of Internal Controls’.
“With that in mind, what framework should be selected in the UK, how should that be implemented, and what are the costs of doing that? This control framework is what is ultimately going to be compared with SOX in the US.” “The challenge for developing something along the lines of SOX in the UK includes understanding the key objective of rolling out a common control framework,” says Shakespeare, Partner in KPMG’s US Accounting and Reporting Group, ICAEW member and US CPA. They both have extensive experience of SOX implementation in the US, the UK and elsewhere in the world. Justin Shakespeare is its current Chair and Kevin Moore is the former Chair. This is the board that regulates the audits of companies with securities listed in the US. The US Sarbanes-Oxley (SOX) Act established, amongst other things, the Public Company Accounting Oversight Board (PCAOB). But what could that look like in the UK and what can we learn from the US experience? Restoring Trust in Audit and Corporate Governance asks whether there is a case for strengthening the internal control framework for the UK and considers the Sarbanes-Oxley provisions.
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