The
Sarbanes-Oxley Act of 2002 was enacted largely in response to a number of major corporate and accounting scandals involving some of the most prominent companies in the United States (Enron, Worldcom). These scandals have resulted in a great loss of public trust in corporate accounting and reporting practices. The main purpose of the Sarbanes-Oxley Act of 2002 is to cultivate and enhance the following:
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- Spirit of transparency
- Culture of accountability
- People of integrity
As far as the Greek market is concerned there are a fair number of companies with US listings either on the NYSE or the NASDAQ, spurred on most recently by a very strong shipping industry. Such companies needless to say are also subject to the Act.
One of the more demanding sections of the Act is 404. This section deals with a company’s system of internal control over financial reporting. Domestic companies (US based entities) have already complied with the requirements of this section. Foreign Private Issuers (non-US based entities), that for the part include all the Greek based entities and the shipping companies need to comply with this section for financial years ending on or after July 15, 2006.
Complying with Section 404 (S.404) has proven to be very time consuming, resource challenging and costly. PwC has been providing S.404 advisory services to its non-audit clients over the last two years as they ready for their initial year of compliance.
PricewaterhouseCoopers offers the methodology and tools that should be used, in order to establish new standards for corporate accountability as well as penalties for corporate wrongdoing. In this way, companies will build in the required processes to ensure that their corporate reporting on internal controls is part of the way they do business, thus being able to satisfy shareholder, public, and other stakeholder requirements with greater confidence.
