By Andy McCue, 3 August 2005 16:35
NEWS Industrial gases group BOC said it faces higher than expected costs, totalling around £20m, over the next two years in order to bring the company into full compliance with the Sarbanes-Oxley (SOX) corporate governance regulations.
In the company's third-quarter results presentation to analysts, BOC chief executive Tony Isaac said he was "surprised" about the high corporate costs of compliance compared to first estimates.
The deadline for SOX compliance is September next year and BOC said it will have to spend £10m this year and another £10m in 2006 to bring its financial reporting and internal controls up to scratch.
In a conference call, Charles Spence, director of financial control at BOC, said of the group's increasing corporate costs: "One of the underlying drivers is the cost of compliance with Sarbanes-Oxley."
The SOX legislation was introduced by the US to prevent another Enron scandal but there have been increasing calls by businesses for the rules to be relaxed because of the high costs of bringing financial reporting processes and related IT systems into compliance.
The Confederation of British Industry called for changes to SOX claiming that it is too onerous and costly, while BT is one of a number of companies which have threatened to de-list from the New York Stock Exchange because of the high costs of compliance.
For more on SOX check out silicon.com's Cheat Sheet.
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