BusinessCompany NewsForeign plcs gain Sarbanes-Oxley reprieve

Foreign plcs gain Sarbanes-Oxley reprieve

The Securities & Exchange Commission has granted companies using foreign accounting standards, including UK GAAP, an exemption from a measure in the Sarbanes-Oxley Act requiring companies to explain financial information that does not conform to US standards.

Link: In depth: Sarbanes-Oxley

The exemption was voted through last week by the SEC as part of a set of rules that demand greater clarity from financial reporting.

The new measure insists US companies must reconcile the non-GAAP information with standard US accounting practices.

But the so-called Regulation G aspect of the new measure, provides an exemption for those foreign companies whose stocks are also listed outside the US.

The provision removes the requirement on foreign companies using standards other than US GAAP to reconcile financial reports to US standards.

The exemptions come just a week before the SEC is expected to issue its final rules regarding the application of Sarbanes-Oxley to foreign companies listed in the US.

UK companies will be relieved by this exception.

However, as Accountancy Age went to press there was yet no mention of loosening requirements on foreign companies in other areas. Much lobbying has taken place across the Atlantic – including a trip by the ICAEW president Peter Wyman – but there is no clear sign of whether it has been successful.

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