A global survey commissioned by PricewaterhouseCoopers aims to identify the potential impacts of Sarbanes-Oxley Section 404 on the global capital markets.
Section 404 requires all SEC-registered companies to include in their annual report a statement by management and the external auditors on the effectiveness of the company’s internal controls over financial reporting.
Other studies have assessed issues relating to Section 404, such as public companies’ state of readiness, the cost of implementation and the time within which companies are likely to achieve the standards required by Section 404. This survey is the first to investigate the potential impact of Section 404 on the global capital markets. Among its objectives were to find out what the global markets’ perception of a negative disclosure on 404 might mean for their valuation of public companies, and to gauge the understanding of Section 404 in the different regions comprising the global capital markets. To achieve this, a total of 105 analysts, investors and ratings agencies from Asia Pacific, Europe and the Americas were asked to participate in detailed telephone interviews.
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