Local companies can breath a sigh of relief now that the Securities and Exchange Commission (SEC) has formally extended the deadline for smaller firms and foreign companies to comply with the Sarbanes-Oxley Act's internal control reporting requirements.
Australian and New Zealand companies affected by the Act now have until July 15, 2006 to roll up their sleeves and find technical solutions to assist with compliance.
The deadline has been extended from July 15, 2005, providing companies with a further 12 months to comply.
SEC director of corporate finance Alan Beller admits non-US companies face a compliance burden and urged organisations to use the extension, not to delay, but improve the quality of their efforts.
Frost & Sullivan security and services analyst James Turner welcomed the extension and said it is good news for Australian business.
"For starters, it takes the heat off for getting things done and dusted this year. But a second benefit is that this gives Australian companies more opportunity to share specialist resources who have intimate knowledge of Sarbanes-Oxley in the Australian market," Turner said.
"We can also learn from the experience of the Americans. It's a good opportunity to review who did what, and what the outcome was, what strategies worked, and what didn't."
Turner also claims that IT vendors, who are positioning their products to help streamline Sarbanes-Oxley compliance, will benefit from this extension.
"With this respite until 2006, Australian companies can now focus on making sure they've got things as they want them before leaping at a solution," Turner said.
As for the reaction from Australian companies, Tuner believes it will be mixed, with some organizations being relieved, while others will push on regardless of the deadline.
"A lot of pain has been shared around with the previous deadline in mind, so going through the change control to relax the discipline may actually taste a little bitter to many," Turner said.