Compliance in the Supply Chain: The Present and Future Implications of Sarbanes-Oxley for UK Businesses

Abstract

Most recent research and press reports on Sarbanes-Oxley have focused on large, dual-listed companies and UK-based subsidiaries of US companies that have to comply with the regulation. Often, these companies have big compliance budgets and have been at the vanguard of Sarbanes-Oxley compliance in the UK. The key aims of this report are to estimate the current number of UK companies that have to be Sarbanes-Oxley compliant, but also how that number will grow over the coming decade, particularly given the impact of the supply chain. The wider impact of Sarbanes-Oxley through the supply chain is a key issue that many UK businesses will have to deal with, many of whom will not have realised the implications to date given their status as partners or suppliers of compliant companies. These supplier companies will need to reengineer their internal processes to provide data to meet the compliant companies' Sarbanes-Oxley reporting requirements. This report also examines UK organisations that will need to comply with Sarbanes-Oxley as a cost of doing business, raising capital or for general corporate governance best practice. The focus of this study is on UK companies, employing between 50 and 1000+ people. The research was informed by relevant studies and reports from the US, as well as conclusions drawn from telephone interviews with UK companies affected by Sarbanes-Oxley and a focus group of leading academics at Henley Management College.