New powers for auditors increase IT's compliance burden

Amendments to the Companies Act 2004 which came into force earlier this month give auditors additional powers to obtain...

Amendments to the Companies Act 2004 which came into force earlier this month give auditors additional powers to obtain accounting information from companies.

UK companies will have to comply with requests for information relating to their accounts and may be subject to investigations by the Financial Reporting Review Panel.

The amended act, which will place greater demands on organisations' accounting systems, adds to the compliance burden on IT directors.

Corporate governance legislation such as Basel 2 and Sarbanes-Oxley, as well as the Freedom of Information Act for the public sector, require IT systems to gather disparate data and assess various risks faced by a business.

As a result, regulatory compliance has become one of the key concerns of IT directors in all industries.

According to a survey published last month by Dell Computer, 75% of UK IT managers believe they are not meeting all of their regulatory compliance requirements. Of the 1,030 IT leaders questioned, more than 50% do not expect to get a return on investment from spending on compliance.

In addition, 45% of IT bosses said their costs had increased over the past two years as a result of compliance work.

Read more on IT legislation and regulation

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