SOX and the UK

#1

Hello everybody, first post and can I at first say thanks to everyone who has contributed to this forum, it really is of great resource to new applicants like myself.

I have my first interview coming up with KPMG this week and was researching into the Sarbanes-Oxley act. Am i correct in saying that the law is imposed only on companies listed within the US? and if so is it still of great importance to KPMG in the UK? Aren’t most of their clients in this country UK listed? If not could anyone give me any examples of US listed clients that KPMG UK deals with? Thanks for your help

#2

SOX applies to all companies listed on the US SEC (Securities and Exchange Commission). Any company listed on the SEC will be covered by SOX - so any company based in the UK will still be bound by SOX if it has a listing on the SEC, or its parent/subsidiary does.

SOX will therefore influence the larger firms who trade in the US.

#3

an example of which is Lloyds TSB…

#4

Ok thanks for your help. Just one more thing, i can see the benefits to accounting forms from the act but apart from possibly losing clients, are there any negative effects of the act on accounting firms? i was reading somewhere about the accounting firms not being able to offer both advisory and audit services but cant see how this links in with SOX? many thanks

#5

SOX contains various do’s and don’ts which accountancy firms must abide by; one of which deals with non-audit services.

The general rule is that an accountancy firm cannot undertake non-audit work for an audit client who is registered on the SEC. That said, there are a few exceptions - for example tax work can be done provided that approval is gained from the client’s audit committee. Any other advisory work is generally prohibited.