FEE slams 'impossible' Sarbanes-Oxley
The extra-territorial features of the Sarbanes-Oxley act have again drawn criticism, this time from the Federation of European Accountants, who has labelled them both 'unnecessary' and 'impossible to apply'.
Link: SEC concedes ground on Sarbanes-Oxley
In a strongly worded response, submitted to the US Securities & Exchange Commission yesterday, FEE said it believed capital markets required ‘principles-based global solutions, and not unilateral imposed rules-base requirements’.
While in favour of the overall objective of restoring investor confidence in capital markets, FEE said Sarbanes-Oxley was ‘very much related to the US legal environment and can be seen as a reaction to mainly US financial reporting problems’.
It added: ‘For European companies and their auditors, many of the Sarbanes-Oxley Act measures, especially as regard their details are, in our opinion, unnecessary, disproportionate, burdensome, or even impossible to apply.’
Sarbanes-Oxley has forced some companies to reconsider listing in the US – one example being German sports car maker Porsche – while European regulators have raised concerns about the impact the laws will have on companies that are listed across the pond.
Recently, the SEC conceded to some countries concerns by proposing modifications to the recently established law.