Monday, November 26, 2007

The 8th EU Directive - No SOX for Europe

The Shaping of Controls Lies in Companies' Own Hands

The opportunity to discuss this and other topics relating to internal auditing attracted more than 700 participants to the German Institute of Internal Auditing (IIR) congress recently held in Cologne at which celebrity speakers such as Jürgen Tiedje of the EU Commission shared their views and some straight-talking answers.

"It's not as if the 8th EU Directive were a European variant of the Sarbanes Oxley Act (SOX). Europe is not going to experience a 'EURO-SOX' or any kind of 'SOX light'." This was one such straight-talking answer from Jürgen Tiedje. And he should know, since he is Head of Unit Auditing at the European Commission in Brussels, the source of the 8th EU Directive. "On the contrary, companies have full organisational liberty to arrange for appropriate internal controls and especially for vigorous internal auditing." This is a clear answer on the part of the Brussels commission to the central question predominating the corporate governance debate regarding the details of impending auditing legislation for companies resident in the European member states. In his talk addressed to Germany's internal auditors at their trade congress, Tiedje explained that the EU will not be emulating the United States model of the Sarbanes Oxley Act, particularly in order to avoid what is viewed by the Brussels authorities as an excessive bureaucratic upheaval, but also in view of the diversity of corporate and business cultures that exist.

The 8th EU Directive - No SOX for Europe

Labels: 8th EU Directive, European Basel Accords

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