Audit watchdog to trim down Sarbox
US audit watchdog, the PCAOB, says Sarbox is being reassessed and could be watered down
Sarbanes-Oxley, the onerous US corporate governance legislation, could be
trimmed down before the end of the year, the chairman of the
Public Company Accounting Oversight Board has
said.
Mark Olson, the
chairman of the US audit watchdog, said in a speech in Washington that the
‘incremental cost to date has exceeded the incremental benefit’ of the rules.
‘This underscores the need for the PCAOB to take another look, and build into
its standard clearer guidance regarding efficient, risk-based, scalable
implementation,’ he said. ‘The PCAOB is determined to make internal control
audits as cost-effective as possible for companies that are required by the
SEC’s rules to obtain an audit report on internal control.’
The PCAOB head said the organisation had a four-point plan to lighten the
Sarbanes-Oxley burden.
The audit regulator is planning to make the standard easier to read and focus
auditors on the areas of the greatest importance. The PCAOB is also reviewing
unnecessary procedures and wants to make internal audits as efficient as
possible. Finally, the organisation will seek to emphasise the importance of a
company’s control environment.
The news will come as a relief to US listed companies, who have suffered huge
costs and massive increases in audit fees in order to
comply with Sarbanes-Oxley.
Further reading:
Laws blocking Sarbox from LSE on their way
US committee to make Sarbox changes