SOXA is no joke

I have spoken before about the fact that the American Legal system needs to work out some issues, primarily relating to the dreaded Sarbannes Oxley Act which imposes many onerous requirements on firms. But besides that, as the CFO Europe magazine reports sourcing data from Lehman Brothers, 214 CEO's & Presidents, 53 CFO's, 23 Lawyers and 129 Vice Presidents were convicted.

In my experience, prior to me joining my current firm, I found that SOXA was not taken seriously, well, not seriously enough on this side of the pond, primarily because the chances of any European being locked up or convicted for a SOXA blow-up being rather small. And nothing that I have read, heard, discussed and debated so far has made me change my opinion. This leads me to believe that it is only a matter of time before this is tested.

And, in my opinion, this is a false assumption.. The Americans can and will go after anybody who has broken American laws (see how the Natwest 4 are currently cooling their heels in the USA). Also remember that their justice system is much more susceptible to political and public pressures compared to ours. Given the strange antipathy that Europeans feel towards America
due to political differences, you can just imagine a screaming headline, "European Firm commits fraud on Mrs. Pensioner, Poughkeepsie, questions raised in Congress, Department of Justice to launch investigation and US Attorney to bring charges against CFO and COO of ABC Europe GMBH"

So if you have any American operations, and you are a CIO, CFO, VP or CEO, who has SOX exposure (your EXTERNAL auditor will be able to advise you about that), spend 1-2 hours getting briefed on the current exposure by your EXTERNAL auditor every quarter. It is time well spent and definitely not wasted. But if there is a control issue, then you have a bigger problem than SOXA, just what the heck are you and your management team doing allowing such huge control holes to exist in the first place?


All this to be taken with a grain of piquant salt!!!