Sarbanes-Oxley is ‘bad model’ warn accountants

By Tim King

Date: 31/03/05

Europe's accountants have warned EU regulators against imitating provisions in the US's Sarbanes-Oxley Act on risk management and internal control.

At issue is the extent to which companies should be required to exercise risk management and internal control in the interests of shareholders.

Despite corporate governance scandals in Europe, the Fédération des Experts Comptables Européens (FEE) declares that: "European shareholders do not necessarily need to look to a European equivalent of US federal securities legislation, such as the Sarbanes-Oxley Act, to bring about improvements in risk management and internal control."

In a report published today (31 March), the FEE, which is the representative body of the European accounting profession, says that the EU should concentrate on "more research and learning from experience" .

But the report also suggests that there is "a need for principles to underpin any regulatory developments in risk management and control".

The FEE limits itself to calling for "a basic EU requirement for all companies to maintain accounting records that support information included in financial statements".

It says that the internal control-related requirements in the EU's 4th, 7th and 8th company law directives should be phased in because "some companies and some member states will have implementation challenges that will take time to resolve".

The FEE report includes an assessment of the existing national requirements in 16 EU countries plus Romania, Norway and the US.

In a report published on 31 March 2005, the FEE (Fédération des Experts Comptables Européens), which is the representative body of the European accounting profession, said that the EU should concentrate on 'more research and learning from experience' instead of imitating provisions in the US's Sarbanes-Oxley Act on risk management and internal control.

http://www.fbe.be/Content/Default.asp http://www.fbe.be/Content/Default.asp

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