In a recent webinar by RegTech firm Diligent, the company outlined how companies can prepare for UK SOX, which is legislation similar to the US Sarbanes-Oxley Act.
According to the BDO UK, the Government has announced details of its corporate governance reforms which will move the UK regime closer to the US Sarbanes-Oxley regulations.
BDO added that the new corporate governance regime will be enforced by a new regulator, the new Audit, Reporting and Governance Authority (ARGA) which will replace the Financial Reporting Council (FRC).
Taking part in the webinar were Turnkey Consulting integrated risk management practice director Marc Jackson and Diligent regional sales director Chris Mills.
According to Jackson, while such corporate governance reforms such as SOX have been on the government’s agenda, many of them took a back seat during the challenges imposed by the pandemic.
He highlighted that earlier this year, however, the UK government provided some clarity on the proposal of SOx, to strengthen the UK’s audit, corporate reporting and corporate governance practices.
“First of all, the underlying actions contained within it will be a positive step towards making the UK a safer place to do business. However, one of the more noticeable emissions in the updated proposals is the dropping of US-style attestation no longer being part of the proposed legislation, and instead some fine-tuning and enhancing to the corporate governance and reporting will be facilitated via the UK’s corporate governance code instead – however, this will not be mandated by law.”
Are UK firms ready for the introduction of SOX and how can they prepare? On this question, Mills stated that of the companies he has spoken to on this matter, many of them are at different stages of readiness, with some far behind while others being highly prepared for the change.
Other topics that were included in the webinar included asking what the wider benefits of firms transforming their internal controls, what functionalities are needed to manage SOX compliance, what are the challenges most commonly associated with a controls transformation programme, what role technology could play in helping to solve and mitigate some of these challenges in order to support a regulation like UK SOX and what considerations UK businesses should make when selecting the right supporting technology for them.
The full webinar can be viewed here.