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April 5, 2005

The Global Economy - SOX

We certainly live in a global economy. This was driven home to me here in the UK by the amount of coverage in this weeks computer press given to the Sarbanes-Oxley bill. For example, one paper had a double page spread on the impact of SOX on UK companies.

The reason for this is the impact the bill has, not only on British or European companies that have a listing in the US, but US companies operating on this side of the Atlantic. It appears that these regulatory controls affect the operations of the companies outside the US.

I then go on to read that other companies, without any operations in the US but trading with US companies, may have similar requirements imposed upon them by their trading partners (the sentiment appearing to be: if we have to comply, so should you).

Then, there are the UK and European software houses that produce packages that sell in the US. Not only do they have to contend with the practical business differences between Europe and the US (such as the differences between US sales tax and VAT), but also the new US regulatory requirements will have to be accommodated.

In addition, there are also new regulatory hurdles in this country to be crossed, with legislation coming from both the UK government and the European Union.

So, it looks like that over the coming few years, IT departments in this country are going to have the same fun/pain that our US counterparts have been having.

Posted by at April 5, 2005 1:51 PM

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Comments

In the movie "Family Man", Nicholas Cage suggest that while in Roman Empire, one should live in Rome. Since Americans are the Romans of the time, and New York is the Rome, one should try to live in New York.

The fact is, Americans have many times more influence on the world than Romans ever had. The good news is, the American Empire is more about influencing business than grabbing land or imposing religion.

So Europeans having an eye on the big businesses in the States better learn to comply the Americans ... and then learn Chinese :)

We Canadians know this better than anybody else :)

Posted by: Hassan Farooqi at April 13, 2005 7:59 AM

Here's another interesting analogy:
In July, 2003, California passed SB 1386: The California Security Breach Information Act. It requires organizations that maintain personal information about individuals to inform those individuals if the security of their information is compromised. However, this law not only applies to California businesses, but ANY business in the US that holds information in their databases on Californians! The net effect: a State law that might as well be a Federal one!

Posted by: Joe Baumgarten at July 18, 2005 12:16 PM

For several years I worked as a programmer/project lead for a large automotive company that became subject to SOX regulation. While there may be some improvement in corporate transparency due to SOX, I'm not sure it's worth the cost. I can tell you that those in the trenches who must do the research and prepare the requisite documentation go through absolute hell. SOX turns otherwise intelligent business analysts who could be doing REAL work into slaves doing unnecessary tedium. After a month of SOX compliance work I felt like my life had somehow fallen into the movie 'Office Space'. This is what happens when industry fails to do the right thing - government gets involved and screws our lives up with needless regulation. Home of the free?... only if you're free to NOT work on SOX compliance!

I live in Maryland. Paul Sarbanes is a MD senator who's retiring soon. Good riddance Paul! Can't say it's been a pleasure.

Posted by: Buzz Loftus at July 19, 2005 12:46 PM

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