Although the US Securities and Exchange Commission (SEC) granted temporary relief to smaller public companies from Sarbanes-Oxley (SOX) compliance reporting, more frequent than quarterly filing/reporting may be in the wings for all public companies, according to a white paper from six international accounting companies. For food manufacturers with customized ERP systems, SOX-compliant software modules will have to be compatible with more frequent reporting as well as supporting controls management and automation, which will create IT headaches for some producers and certainly increase operating expenses for all.
In the latter part of 2006, SEC granted relief to smaller (market value less than $75 million) public companies by extending the date six months by which non-accelerated filers must start providing a report assessing the effectiveness of the company’s internal control over financial reporting on fraud-prevention controls.
However, according to the white paper, the big six auditing firms are requesting more frequent reporting than the 70-plus year old quarterly reporting required in the US, saying it would better meet the needs of today’s investors and be more compatible with international standards.
According to the white paper, “Global Capital Markets and the Global Economy: A Vision From the CEOs of the International Audit Networks,” Internet technologies such as XBRL (Extensible Business Reporting Language) will revolutionize the way investors, governments, and companies themselves use, analyze and generate information. With these technologies, investors and regulators can have nearly real-time access to financial and other company information, making quarterly profit reporting no longer relevant.
The white paper was published by BDO International, Deloitte, Ernst & Young, Grant Thornton International, KPMG International, and Pricewaterhouse Coopers. It can be found at www.globalpublicpolicysymposium.com