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Sarbanes-Oxley News & Developments
One Audit Committee - Many RegulatorsAudit Committees in Europe are treading a fine line between U.S. and home country law.
> > Audit committees in Eurpoe are facing pressure from investors, governance watchdogs, and top management which are causing some companies to change their audit committees to a level that complies with the U.S. new Sarbanes-Oxley Act.
Skandia, one of the oldest publicly listed companies in Europe, made changes this year. Many changes where made because its new CEO, Leif Victorin, wanted a greater level of comfort when he took the job earlier this year. Throughout Europe, companies like Skandia are having to reconsider their oversight arrangements, as audit committees become the focal point of sweeping changes to corporate governance on both sides of the Atlantic. In the wake of Enron and other recent corporate failures, both the U.S. and European authorities have mandated that audit committees, often seen in the past as a glorified rubber stamp for financial results, are the chief guardians of the financial integrity of a company. These committees have been handed the central responsibility for ensuring there are adequate internal audit regimes; for hiring, monitoring and compensating external auditors, and ensuring their independence; for ensuring there are procedures to allow whistleblowers to come forward; and much else besides.
The U.S. and Europe have set broadly similar criteria for audit committees, but there is one crucial difference: in the U.S. it is the law, whereas Europe is taking a non-satutory, comply or explain route.
Source: CFO
Published:2003-09-23
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