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Do not let up on Sarbanes-Oxley compliance projects, says Gartner

Nick Huber
UK companies should not ease up on their IT projects to comply with the evolving demands of the Sarbanes-Oxley Act, despite a recent relaxation on the reporting requirements of the corporate governance regulation, analyst firm Gartner has warned.

The US financial markets regulator, the Securities and Exchange Commission, last month said it would delay plans to require firms to file their quarterly and annual reports within 60 days of their financial period closings, rather than 75 days under current regulations.

The 60-day reporting requirement was due to come into force next year.

Although originating from the US, Sarbanes-Oxley affects UK companies that are listed on the main US stock exchanges.

Gartner has warned that the Sarbanes-Oxley regulations still pose significant challenges for corporate IT departments leaving no room for complacency.

IT challenges include verifying that information held within disparate systems worldwide is correct; and that controls are in place to prevent staff accessing unauthorised information. Firms will also need to show an audit trail of changes made to IT systems.

"For the 2005 budgets IT people should consider the technology necessary to comply with Sarbanes-Oxley," said French Caldwell, vice-president and director at the compliance service of Gartner.

He added that the technology needed to comply - to manage records and monitor business activity, business processes and corporate performance - could give firms a return on investment.

"[The technology] can decrease the storage you need and litigation costs may go down as you have an audit trail for everything you do."

The European Commission published a proposed directive on auditing earlier this year that has serious implications for IT.

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